The payback period for evaluating capital investment projects emphasizes:
a. Average after-tax cash inflow divided by average investment.
b. Profitability.
c. Cost of capital.
d. Liquidity.
e. Average net income divided by average investment.
d. Liquidity.
Payback focuses on the amount of time it takes to return, in the form of after-tax cash inflows, the original investment outlay for a project. In this sense, it focuses on liquidity rather than the profitability of the proposed investment.
You might also like to view...
The "bigness" of Big Data can be seductive and lead researchers to not question which of the following?
a. representativeness b. sample frame c. purposeful nonrandomness d. all of these
The pervasive nature of advanced communications technologies, such as the Internet, has resulted in greater exposure of customers to advertising content than it was in the 1960s
Indicate whether the statement is true or false