Question

The 'Payback Period' method of capital budgeting

Q: Answer-The 'Payback Period' method of capital budgeting evaluates a project based on:

The Payback Period is a simple capital budgeting technique that calculates the length of time required for an investments net cash inflows to equal its initial cost. It focuses on liquidity and risk, not on profitability.

evaluates a project based on:

A The project's profitability over its entire life.

B The time it takes for the project's cash inflows to recover the initial investment.

C The net present value of all future cash flows.

D The project's internal rate of return.

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The 'Payback Period' method of capital budgeting

Solution