Which of the following statements are correct regarding the payback period? I –

Question

Which of the following statements are correct regarding the payback period?
I – The payback period is computed based on the present value of each of a project’s cash flows.
II – The payback period is biased in favor of short-term investments and liquidity.
III – The payback period considers the timing and the amount of all the project’s cash flows.
IV – The payback period is best used to evaluate low-cost and short-term projects.

Question 9 options:

1) I and III 2) I and IV 3) II and IV 4) I, II and III

Explanation / Answer

is II and IV

payback is best used to evaluate low-cost, & short-term loan

3)Answer

is II and IV

payback is best used to evaluate low-cost, & short-term loan

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