The payback period method of evaluating an investment ignores cash inflows after the point where an investment's costs are fully recovered.

Name: The payback period method of evaluating an investment ignores cash inflows after the point where an investment's costs are fully recovered.
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The payback period method only considers the time it takes to recoup the initial investment and does not consider cash inflows that occur after that point.

The Payback Period Method of Evaluating an Investment Ignores Cash