Business, 24.06.2021 20:20 kelleemaebarnha

One way to compare potential investments is to compute and compare their payback periods. The payback period is an estimate of the expected time before the cumulative net cash inflow from the investment equals its initial cost. A payback period analysis fails to reflect risk of the cash flows, differences in the timing of cash flows within the payback period, and cash flows that occur after the payback period. All of the following are weaknesses of the payback period: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
a. it uses cash flows, not income,
b. it is easy to use.
c. it ignores all cash flows after the payback period.
d. it ignores the time value of money.

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One way to compare potential investments is to compute and compare their payback periods. The paybac...