Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 20E
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Question
Which of the following is correct?
• the shorter a projects payback period, the less desirable the project is normally considered to be by this criterion
• one drawback of the payback criterion is that this method does not take account of cash flows beyond the payback period.
• if a projects payback is postitive, then the project should be accepted because it must have a positive
• the regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem
•one drawback of the discounted payback is that this method does not consider the
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