The main advantage of the payback rule is:
A) Adjustment for uncertainty of early cash flows
B) It is simple to use
C) Does not discount cash flows
D) Both A and C

Question

Quizplus · Accepted Answer

The main advantage of the payback rule is that it is simple to use, making it a quick way to evaluate potential investments. However, it does not take into account the time value of money, which is a significant disadvantage. Therefore, while it may be a useful initial screening tool, it should not be relied on as the sole method of investment analysis.

The Main Advantage of the Payback Rule Is