A major problem with the discounted payback period is that Blank______. Multiple choice question. the cash flows beyond the cutoff date are ignored cost of implementation is ignored opportunity costs are ignored the time value of money is ignored

A major problem with the discounted payback period is that Blank______. Multiple choice question. the cash flows beyond the cutoff date are ignored cost of implementation is ignored opportunity costs are ignored the time value of money is ignored

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 20E

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Question

A major problem with the discounted payback period is that Blank______.

Multiple choice question.

the cash flows beyond the cutoff date are ignored

cost of implementation is ignored

opportunity costs are ignored

the time value of money is ignored

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Help pls
The payback period method has been criticized for not taking the time value of money intoaccount. Could this limitation be overcome? If so, would this method then be preferable to theNPV method?
Which of the following is NOT a limitation of the payback rule? O It does not consider cash flows occurring after the payback period. O Lacks a decision criterion that is economically based. O It does not consider the time value of money. O It is difficult to calculate.
One of the shortcoming of the payback method is that it ignores cash flows after the payback period. True False
One of the Disadvantages of the method Discounted payback period is Ignores the time value of money Select one: True False
Which of the following arguments about time line is right?Group of answer choices a)Time line can be construct for annuity only. b)Time line is useful no matter the payment is constant or not. C)Time line is useless when the cash flow is uneven. d)Time line is only useful when the payment is constant.
Technical problems associated with the internal rate of return include: a. the possibility of multiple IRRs, which rarely present practical difficulties b. the assumption that all cash flows are reinvested at the IRR c. neither of the above d. both of the above
One problem with free cash flow method is gives too much weight to countinung value. Do you agree
Internal rate of return (IRR) and net presetn value (NPV): -Generally arrive at the same accept/reject decisions-are less sophisticated than payback period-cannot make use of the same cash flows-can be subsitured for by the payback period
What are the two drawbacks associated with the payback period a. The time value of money is ignored.It ignores cash flows beyond the payback period b. The time value of money is considered.It ignores cash flows beyond the payback period c. The time value of money is considered.It includes cash flows beyond the payback period d. The time value of money is ignored.It includes cash flows beyond the payback period
The payback criterion has problem(s) like Select one: O A. It considers the time value of money O B. It ignores the cash outflows or inflows after the payback period and the time value of money O C. It considers the inflows and outflows after the Payback Period O D. It considers all the cash outflows or inflows of the project
The discounted payback method is better than the regular payback method because The time value of money is considered. The rate of return is allowed to vary. The concept is based on irregular time periods. None of the above.