The payback method is consistent with the goal of shareholder wealth maximization.

Question

Quizplus · Accepted Answer

The payback method is not consistent with the goal of shareholder wealth maximization as it focuses on recovering the initial investment rather than generating maximum returns for shareholders over the long-term. Shareholders are more concerned about the overall profitability and future cash flows of the investment rather than the length of time it takes to recoup the initial investment.

The Payback Method Is Consistent with the Goal of Shareholder