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What is the disadvantage of (payback method) for assessing an investment project ?

Accounting Venture Management Capital Goods Project Management managerial accounting
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Question added by Mahmoud Farag Abdelrahman Farag ACCA CMA , Financial manager , Advanced Int’l trading Co
Date Posted: 2016/11/06
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khalil masri
by khalil masri , Project Administrator / CAFM Tech. , Al Majal Al Arabi Holding Company

1. In the calculation of pay back period, time value of money is not recognized.2. Pay back period gives high emphasis on liquidity and ignores profitability.3. Only cash flow before the pay back period is considered. Cash flow occurred after the PBP is notconsidered.

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