2D3A DESPITE ITS SHORTCOMINGS, THE TRADITIONAL PAYBACK PERIOD CONTINU...

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CSO: 2D3a

LOS: 2D3a

Despite its shortcomings, the traditional payback period continues to be a popular method

to evaluate investments because, in part, it

a.

provides some insight into the risk associated with a project.

b.

ignores the time value of money.

c.

focuses on income rather than cash flow.

d.

furnishes information about an investment’s lifetime performance.