Which one of the following statements related to payback and discounted payback is correct?
A)Payback is a better method of analysis than is discounted payback.
B)Discounted payback is used more frequently in business than is payback.
C)Discounted payback does not require a cutoff point like the payback method does.
D)Discounted payback is biased towards long-term projects while payback is biased towards short-term projects.
E)Payback is used more frequently even though discounted payback is a better method.

Question

Quizplus · Accepted Answer

Discounted payback takes into account the time value of money, making it a more accurate method than the traditional payback method, which does not. However, due to its simplicity, the payback method is still used more frequently in practice.

Which One of the Following Statements Related to Payback and Discounted