--%>
Assignment Help - homework help

Explain computing of payback period

How do we compute the payback period for proposed capital budgeting project? What are the basic criticisms of the payback method?
We compute the payback period for proposed project through adding a project's positive cash flows, one period at time, till the sum equals the initial investment. The number of time periods it takes to cover up this investment is the payback period. The basic criticisms of the payback method are that cash flows after the payback period are avoided and the time value of money is not assumed.

   Related Questions in Finance Basics

  • Q : Explain agents and their

    Normal 0 false false

    		•
  • Q : Shapes of marginal-cost and the

    Normal 0 false false

    		•
  • Q : How are financial trades made on a

    How are financial trades made on a planned exchange?Each of exchange listed security is traded at a particulate location on the trading floor called the post. The trading is supervised through specialists who act either as brokers (bringing toge

    		•
  • Q : Clarify retained earnings and its

    Clarify retained earnings?  Describe importance of this? Retained earnings represent the sum of all the earnings available to common stockholders of a business at the time of its entire history, minus the tota

    		•
  • Q : Explain Object of Expenditure Object of

    Object of Expenditure (Objects): It is a categorization of expenditures based on the kind of goods or services received. For illustration, the budget group of Personal Services comprises the objects of Salaries and Wages and Staff Benefits.

  • Q : Consumers advocates expressed concern

    Consumer's advocates expressed concern over such merger possibilities. Elucidate this statement.

    		•
  • Q : Assignments i want to write final

    i want to write final report about my state Texas. using the resources that i attached and the other resources to cover the outlines.

    		•
  • Q : Describe the Hirfindahl-Hirschman Index

    Describe the Hirfindahl-Hirschman Index?The Hirfindahl-Hirschman Index, or HHI, is the standard measure employed by economists to evaluate market concentration. The greater the level of concentration amongst competitors, the higher the HHI. The

    		•
  • Q : Determine sizes of the MPC- the MPS and

    Normal 0 false false

  • Q : Price The Audiology Department at

    The Audiology Department at Randall Clinic offers many services to the clinic’s patients. The three most common , along with cost and utilization data, are as follows: Service Variable cost per service Annual Direct Fixed cost Annual Number of Visits Basic Examination $5. $50,000 3,000 Advanced

    		•