Investment Appraisal: Payback Period

The payback period is calculated by determining the total cash inflows and outflows over the life of the investment.

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False

The payback period focuses on how long it takes to repay the initial investment cost.

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False

The payback period method is considered inaccurate because it focuses on long-term returns instead of short-term payback.

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False

One advantage of the payback period method is its complexity in calculation and interpretation, making it difficult to compare different investment options.

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False

A drawback of the payback period method is its comprehensive analysis of the profitability of an investment and its consideration of returns after the payback period.

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False

The payback period method of investment appraisal focuses on determining how long it takes to repay the initial investment cost.

True

False