The payback method,unlike the net present value method,ignores cash flows after the point of cost recovery.

Question

Quizplus · Accepted Answer

The payback method only looks at how long it takes to recover the initial investment and does not consider any cash flows beyond that point. The net present value method, on the other hand, takes into account all future cash flows and calculates their present value to determine if the investment is worthwhile.

The Payback Method,unlike the Net Present Value Method,ignores Cash Flows