Cash payback method:
Cash payback period is the expected time period which is required to recover the cost of investment. It is one of the capital investment method used by the management to evaluate the long-term investment (fixed assets) of the business.
In simple, the cash payback period is computed as follows:
Net present value method is the method which is used to compare the initial
To discuss: The uses of the cash payback period for analyzing the financial performance over the net present value method.
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Chapter 26 Solutions
Accounting
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- Why might the riskiness of cash flow from the residual value of the real estate differ from the riskiness of cash flow from the corporation’s core business? What would cause these cash flows to be correlated?arrow_forwardUnder the indirect method of estimating project cash flows, an increase in trade creditors in a given year as a result of a project would be treated in what way? Treated as a cash inflow Treated as a cash outflow Excluded from the cash flow analysis as this is a sunk cost Excluded from the cash flow analysis as no cash has been paid or receivedarrow_forward
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