Projects favored using payback techniques will be ranked the same using net present value.

Question

Quizplus · Accepted Answer

Payback techniques only consider the time period it takes to recover initial investment, while net present value takes into account the time value of money and considers all cash flows associated with the project. Therefore, projects that are favored using payback techniques may not necessarily have a positive net present value, and vice versa.

Projects Favored Using Payback Techniques Will Be Ranked the Same