Critically evaluate the payback technique.

Q: What is a satisfiable investment? When the present value of benefits surpasses the cost of an…

A: This question explains about the present value of benefits surpasses and the cost of an investment…

Q: Which are the Methods for Finding Rate of Return?

A: A Rate of Return (ROR) is the gain or loss of an investment over a certain period of time. When the…

Q: What happens if the payback period is within the acceptable range?

A: The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the…

Q: Define the term internal rate of return?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: What is a value-for-money (VFM) audit? Give one example

A: Auditing: Auditing is the practice of verification of the data and records that are prepared. It is…

Q: d. Explain why NPV is considered technically superior to Payback and Accounting Rate of Return (ARR)…

A: There are various capital budgeting methods that can be used to assess or evaluate various…

Q: Explain payback period

A: Answer: Payback period is nothing but the time a company gets back the money that is originally…

Q: Explain an example of payback how to calculate.

A: A payback period is the amount of time needed to earn back the cost of an investment. The length of…

Q: What is the principal objection to the payback method?

A: The Payback period is one of the traditional or non-discounting techniques of Capital budgeting. It…

Q: How is the payback period determined?

A:

Q: Describe the strengths and weakness of payback method.

A: Definition:   Payback method: Payback method refers to the method which measures the time period…

Q: What is the payback method? What are its main strengths and weaknesses?

A: Explain the meaning of the payback method.   The payback period is the expected time period which is…

Q: Define the term Trade-Off between Risk and Reward?

A: Risk-Reward trade off refers to an investment principle which indicates higher the risk, higher is…

Q: Identify and differentiate or define the types of

A: There are mainly two types of payback analysis : 1. Payback period 2. Discounted payback period

Q: Does the IRR measure ignore the scale of investment?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: Explain Target Return on Investment?

A: Investments are done to get the return on the same. Generally, investments are done when an…

Q: what is meant by the required rate of return

A: The return which is expected to be earned by investing in a security is known as Required Rate of…

Q: What is the project's discounted payback?

A: Investment appraisal techniques are used while investing in any project. These techniques tell us…

Q: What is meant by the term payback period? How is the payback period determined? How can the payback…

A: Meaning: The payback period is the time required to earn back the amount invested in a particular…

Q: An NPV analysis is one part of a complete captial investment analysis. What is the second part that…

A: Introduction: An analysis of capital investment is the mechanism by which management prepares,…

Q: Explain the Trade-Off between Risk and Reward?

A: The trade-off means to lose one thing to achieve another thing. For example An organization is…

Q: List the advantages and disadvantages of the payback method.

A: Payback method is a capital budgeting method which helps to evaluate an investment based on the time…

Q: What formula to use to find Payback Period and NPV? (in Excel)

A: NPV or Net Present Value is the present value of all net cash cashflow on a provided discount rate.…

Q: Explain real rate of return

A: This is the raw rate of return adjusted with inflation. It is used to ascertain the effective return…

Q: What is the decision rule for payback?

A: Payback period is the period of time taken by the project to recover the investment in such project…

Q: What is the conventional-payback method?

A: Conventional Payback Method

Q: Describe the Methods for Finding Rate of Return?

A: Capital budgeting is the process a company follows to decide whether to purchase a fixed asset or…

Q: Can we consider Project Risk by Discount Rate?

A: The discount rate is an interest rate that is used in computing the present value of the future cash…

Q: What are some criticisms of the payback method?

A: Payback Period: Payback period is the period in which the project recovers its initial cost of the…

Q: What formula do you use to calculate the payback period?

A: Capital budgeting is a process to determine the worth of the project in which the company wants to…

Q: which investment vehicle is better

A: Investment vehicles are the ways in which investors can invest and seek to grow their investment…

Q: What should be done to apply rate-of-return analysis correctly?

A: Rate of return: It can be defined as the rate of interest that has been earned by the company on the…

Q: Explain realized rate of return

A: The return generated by an investment is any asset class is the normalized rate of return. When the…

Q: What are the weaknesses of the payback method?  What other options do you have?

A: Pay back period is period required to recover initial amount of investment.

Q: Briefly explain the problems associated with the payback method.

A: Capital budgeting is referred as the process of decision making which is used by companies to…

Q: Describe the process of the Net-Investment Test?

A: The Net-Investment test is done to figure out if an investment is a 'Pure investment' or a 'Mixed…

Q: Solve the problem by payback period.

A: Pay back period method is a method of capital budgeting. It is the time required for the project…

Q: Discuss and evaluate the use of the payback period as an investment criterion.

A: Payback Period: It refers to the period in which a project or an investment recovers its initial…

Q: How can we Consider Project Risk by Discount Rate?

A: In corporate finance, a discount rate is the rate of return used to discount future cash flows back…

Q: What are the weaknesses of the payback method?

A: Payback period is the amount of time required for firm to recover its initial investment in projects…

Q: What are the two main drawbacks of the payback method?

A: Payback period is the method in capital budgeting which refers to the time needed to recoup the…

Q: Describe the advantages of using CAPM model to determine the expected return.

A: The question is related to Capital Asset Pricing Model.

Q: Explain an example how to calculate internal rate of return.

A: IRR is the return actually earned by the investor and discount rate is the return which the investor…