Which of these are disadvantages of the payback method?
I.May ignore some cash flows
II.Required time period is set arbitrarily
III.Easy to compute
IV.Ignores the time value of money
A)IV only
B)I and III only
C)II and IV only
D)II,III,and IV only
E)I,II,and IV only

Question

Quizplus · Accepted Answer

The payback method may ignore some cash flows beyond the payback period, the required time period is set arbitrarily, and it ignores the time value of money.

Which of These Are Disadvantages of the Payback Method