An advantage of the payback method is its: A) Application of readily available accounting data

Finance Apr 01, 2021

An advantage of the payback method is its: A) Application of readily available accounting data. B) Simplicity. C) Long-term perspective. D) Time value of money considerations. El Cut-off point.
266)

Expert Solution

Answer

B )

Explanation

Advantages of the payback period:

1) Simplicity: The concept is simple to understand and easy to calculate.

2) Risk focus: This concept focuses on how fastly the investor gets back what he invested. Shorter payback period also has a lower risk.

So, the correct option is B "Simplicity".

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