Asked by Pankaj Kumar on Jul 04, 2024
Verified
Cash payback method
A) Method that does not use present value
B) Method that uses present value
Cash Payback Method
A financial analysis method used to determine the time needed for an investment to generate cash flows sufficient to recover the initial investment cost.
Present Value
The current value of a future amount of money or stream of cash flows given a specified rate of return.
- Discern among various approaches to capital investment analysis and their respective applications.
Verified Answer
JP
Juliel PelaezJul 10, 2024
Final Answer :
A
Explanation :
The cash payback method does not use present value. It calculates the time it takes for an investment to generate cash flows sufficient to recover the initial cost of the investment.
Learning Objectives
- Discern among various approaches to capital investment analysis and their respective applications.
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