The three potential flaws with regular payback method and whether the discounted payback method corrects all three flaws. Introduction: Payback Period: It refers to the time period that is required to get an amount invested in a project with some return on it. In other words, it is the time that a project takes to repay the amount invested with some return attached to it. Discounted Payback Period: It refers to the time that a project takes to repay the amount invested with some return attached to it after considering the time value of money or discounted cash flows.

Question

Want to see the full answer?

Answer 1

Question

Chapter 11, Problem 2Q

Summary Introduction

To explain: The three potential flaws with regular payback method and whether the discounted payback method corrects all three flaws.

Introduction:

Payback Period:

It refers to the time period that is required to get an amount invested in a project with some return on it. In other words, it is the time that a project takes to repay the amount invested with some return attached to it.

Discounted Payback Period:

It refers to the time that a project takes to repay the amount invested with some return attached to it after considering the time value of money or discounted cash flows.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

What are three potential flaws with the regular payback method? Does the discounted payback method correct all three flaws? Explain.

Discuss five potential flaws with the regular payback method. Does the discounted payback method correct all the five flaws? Explain

What are the two main drawbacks of the payback method?

Answer 2

Question

Chapter 11, Problem 2Q

Summary Introduction

To explain: The three potential flaws with regular payback method and whether the discounted payback method corrects all three flaws.

Introduction:

Payback Period:

It refers to the time period that is required to get an amount invested in a project with some return on it. In other words, it is the time that a project takes to repay the amount invested with some return attached to it.

Discounted Payback Period:

It refers to the time that a project takes to repay the amount invested with some return attached to it after considering the time value of money or discounted cash flows.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 11, Problem 2Q

Summary Introduction

To explain: The three potential flaws with regular payback method and whether the discounted payback method corrects all three flaws.

Introduction:

Payback Period:

It refers to the time period that is required to get an amount invested in a project with some return on it. In other words, it is the time that a project takes to repay the amount invested with some return attached to it.

Discounted Payback Period:

It refers to the time that a project takes to repay the amount invested with some return attached to it after considering the time value of money or discounted cash flows.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 11, Problem 2Q

Summary Introduction

To explain: The three potential flaws with regular payback method and whether the discounted payback method corrects all three flaws.

Introduction:

Payback Period:

It refers to the time period that is required to get an amount invested in a project with some return on it. In other words, it is the time that a project takes to repay the amount invested with some return attached to it.

Discounted Payback Period:

It refers to the time that a project takes to repay the amount invested with some return attached to it after considering the time value of money or discounted cash flows.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 11, Problem 2Q

Summary Introduction

To explain: The three potential flaws with regular payback method and whether the discounted payback method corrects all three flaws.

Introduction:

Payback Period:

It refers to the time period that is required to get an amount invested in a project with some return on it. In other words, it is the time that a project takes to repay the amount invested with some return attached to it.

Discounted Payback Period:

It refers to the time that a project takes to repay the amount invested with some return attached to it after considering the time value of money or discounted cash flows.

Answer 6

Chapter 11, Problem 2Q

Summary Introduction

To explain: The three potential flaws with regular payback method and whether the discounted payback method corrects all three flaws.

Introduction:

Payback Period:

It refers to the time period that is required to get an amount invested in a project with some return on it. In other words, it is the time that a project takes to repay the amount invested with some return attached to it.

Discounted Payback Period:

It refers to the time that a project takes to repay the amount invested with some return attached to it after considering the time value of money or discounted cash flows.

Answer 7

Chapter 11, Problem 2Q

Summary Introduction

To explain: The three potential flaws with regular payback method and whether the discounted payback method corrects all three flaws.

Introduction:

Payback Period:

It refers to the time period that is required to get an amount invested in a project with some return on it. In other words, it is the time that a project takes to repay the amount invested with some return attached to it.

Discounted Payback Period:

It refers to the time that a project takes to repay the amount invested with some return attached to it after considering the time value of money or discounted cash flows.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 11 - How are project classifications used in the...Ch. 11 - Prob. 2Q Ch. 11 - Why is the NFV of a relatively long-term project...Ch. 11 - Prob. 4Q Ch. 11 - If two mutually exclusive projects were being...Ch. 11 - Discuss the following statement: If a firm has...Ch. 11 - Prob. 7Q Ch. 11 - Project X is very risky and has an NPV of 3...Ch. 11 - Prob. 9Q Ch. 11 - A firm has a 100 million capital budget. It is...

Concept explainers

Want to see the full answer?

Chapter 11 Solutions