When comparing the payback and discounted payback, the discounted payback is more diﬃcult to
compute and thus is not as widely used as the payback method.

Question

Quizplus · Accepted Answer

This statement is true. The discounted payback method takes into account the time value of money and requires discounting future cash flows. This makes it more complex to calculate compared to the payback method, which only looks at the time it takes to recoup the initial investment. Therefore, the payback method is more commonly used in practice.

When Comparing the Payback and Discounted Payback, the Discounted Payback