A disadvantage of the payback statistic is that ___________.
A) It does not reflect the time value of money
B) It does not give an indication of the project's riskiness
C) It does not consider cash flows beyond the payback period
D) All of these are disadvantages of payback

Question

Quizplus · Accepted Answer

All of these are disadvantages of payback. The payback statistic does not consider the time value of money, does not give an indication of the project's riskiness, and does not consider cash flows beyond the payback period. As a result, it has limitations in evaluating the profitability and viability of investment projects.

A Disadvantage of the Payback Statistic Is That ___________