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Payback period is the method in which the time to recover the projected cash inflow equals the investment expenditure calculated. True or false?

Accounting Team Management Accounts Receivable Financial Accounting General Ledger Reconciliation
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Question added by Musa Muhammad Dandikko , Ag. Head of Procurement , Federal College of Education, Katsina
Date Posted: 2013/10/23
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Khaled Abdelrehim ACCA DipIFR CMA
by Khaled Abdelrehim ACCA DipIFR CMA , Financial Analysis Assistant General Manager , Khalda Petroleum Company

the time of the projected cash inflows equals the investment outflow expenditure

Deleted user
by Deleted user

True

I agree with the answers given already.Payback method is a simplistic approach of reviewing capital investment feasibility, without the complexity of time value of money.

mukkur srinivasan varadhan
by mukkur srinivasan varadhan , Chartered Accountant , Chartered Accountant in practice

True,without giving effect to the time value of money.

Mohammad Ibrahim, CMA, CertIFR
by Mohammad Ibrahim, CMA, CertIFR , Accounting Operation Team Leader , KFH ( Kuwait Finance House )

True ,

payback Period is a way to calculate the period of Time taken to recover the Investment Expenditures .  

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