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

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

the cash flows beyond the cutoff date are ignored

cost of implementation is ignored

opportunity costs are ignored

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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
Help pls
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 Disadvantages of the method Discounted payback period is Ignores the time value of money Select one: True False
Which of the following are disadvantages of the average accounting return (AAR)? More than one answer may be correct. Multiple select question. It ignores the time value of money. It uses an arbitrary benchmark cutoff rate. Its input data is not easily available. It is based on cash flows and market value.
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
Which of the following is a disadvantage of the average rate of return method? a. fails to consider the time value of money b. includes the amount of income earned over the entire life of the proposal c. emphasizes accounting income d. difficult to use
Which of the following are significant flaws with the Payback Period Method? (Select all that apply) A. Biased against long-term projects B. Uses an arbitrary benchmark C. Very rarely used in practice D. Uses accounting profits rather than cash flows E. Ignores Time Value of Money
Which of the following is a disadvantage of the IRR project evaluation method? Select one: a. It does not take into account the time value of money. b. If there are negative cash flows after positive cash flows, there may be zero or multiple internal rates of return. c. It does not make adequate allowance for risk. d. It focuses on accounting profit rather than cash flow as the source of value.
One of the shortcoming of the payback method is that it ignores cash flows after the payback period. True False
Which ones identify the disadvantages of the payback rule? A. Very simple and easy to apply. B. Ignores the time value of money. C. The cutoff payback is arbitrary. All of the above. B and C of the above.
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.