Asked by
Kiana Carlos
on Oct 10, 2024Verified
A shorter payback period does not necessarily mean that one investment is more desirable than another.
Payback Period
The length of time that it takes for a project to fully recover its initial cost out of the net cash inflows that it generates.
Investment
Allocation of capital or resources to assets with the expectation of generating profit or income.
- Understand the payback period method and its limitations in investment decisions.
Verified Answer
AE
Learning Objectives
- Understand the payback period method and its limitations in investment decisions.