The Payback method takes the initial investment and divides it by the accelerated depreciation per year of the investment True False In the Statement of Cash Flows, depreciation is ignored because it is a non cash expense. True False

The Payback method takes the initial investment and divides it by the accelerated depreciation per year of the investment True False In the Statement of Cash Flows, depreciation is ignored because it is a non cash expense. True False

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter11: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 3MC

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Question

The Payback method takes the initial investment and divides it by the accelerated depreciation per year of the investment

True

False

In the Statement of Cash Flows, depreciation is ignored because it is a non cash expense.

True

False

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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