2D3B WHICH ONE OF THE FOLLOWING IS NOT A SHORTCOMING OF THE PAYBACK M...

344.

CSO: 2D3a

LOS: 2D3b

Which one of the following is not a shortcoming of the payback method?

a.

It offers no consideration of cash flows beyond the expiration of the payback

period.

b.

It ignores the time value of money.

c.

It offers no indication of a project’s liquidity.

d.

It encourages establishing a short payback period.