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Project appraisals contains a method called Payback period? which: a. Takes into consideration of cash flows after payback period b. Takes into consideration only cash flows within payback period and ignores after that c. Is the best method of project appraisal d. calculates cash flows of1st and2nd year
b. Takes into consideration only cash flows within payback period and ignores after that
Option B is the right answer.
Answer ( B ) ,
one of the dis-advantage of payback period , is it did not take into consideration :
1- the Time Value Of Money ( Discounted ) .
2- any cash flow beyond the payback Period .
B is correct answer and its huge disadvantage
Will go to "B"
Payback methoed tells managment haw many months or years it will take to recover the original cash cost of the project.
Cost of the project / annual cash revenues = Payback period
Choice B is the answer for your question dear brother
It is the period by which origional investment will be earned and the
Answer is "B"
Takes into consideration only cash flows within payback period and ignores after that
Answer B.
Joshi Mathew
Cia
