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

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter1: Multinational Financial Management: An Overview

Section: Chapter Questions

Problem 2ST

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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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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?
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
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
One problem with free cash flow method is gives too much weight to countinung value. Do you agree
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.
Disadvantage of the payback method include: Answer choices are below: A) does not consider cash flows past payback period. B) the most common version does not account for time value of money. C) has a bias against long-term projects such as research and development and new product launches. D) all of the above.