The method that measures the time it will take to recoup, in the form of cash inflows, the total dollars invested in a project is called the
A)the accrued accounting rate of return method.
B)payback method.
C)internal rate of return method.
D)book-value method.
E)the NPV.

Question

Quizplus · Accepted Answer

The payback method measures the time it will take to recoup the total dollars invested in a project. This method does not take into account the time value of money, but it is a simple and easy-to-understand approach for evaluating projects. The other methods listed (accrued accounting rate of return, internal rate of return, book-value, and NPV) are more complex and take into account the time value of money.

The Method That Measures the Time It Will Take to Recoup