Payback period method, finance, Other Engineering

Assignment Help:
Non-discounted cash flow method,

Payback period method
In this method, time value of money is not considered. It takes into account the number of years required to recover the initial investment of a project (Harold Bierman, Seymour Smidt, 2006).
Accept Reject Rule:
Accept the project with lowest payback period.
Reject the project with highest payback period.
Merits:
1. Simple and easy to calculate
2. Less costly to use
3. Less time consuming
De-merits:
1. Time value of money is completely ignored.
2. Does not consider the cash flow generated after payback period.

Related Discussions:- Payback period method, finance

Internal rate of return irr, Internal rate of return IRR In case of IRR met...

Internal rate of return IRR In case of IRR method cash flow are analyzed taking into account the magnitude and the timing. IRR is that discount rate which gives a net present value

Logic gate -xor gate, 'Exclusive or' gate: The basic OR gate illustrate...

'Exclusive or' gate: The basic OR gate illustrated previously in Figure 3 was seen to include the AND operation in that its output will adopt the 1 state not only when either i

Imaging seekers , Imaging Seekers  Although there are a wide variety...

Imaging Seekers  Although there are a wide variety of imaging sensors (cameras), the majority of modern aircraft systems are based on conventional TV camera technologies (al

Production system, Garden Variety Flower Shop uses 750 clay pots a month. ...

Garden Variety Flower Shop uses 750 clay pots a month. The pots are purchased at $2 each. Annual carrying costs are estimated to be 25 percent of cost, and ordering costs are $30

System dynamics , System Dynamics  Crucial to the development of a guid...

System Dynamics  Crucial to the development of a guidance system is an understanding of the dynamics of the system. In particular, it is necessary to understand how the acceler

EMI, explain ramp type

explain ramp type

Risk Decomposition, Analyze two stocks from an industry of your choice in t...

Analyze two stocks from an industry of your choice in terms of risk decomposition, specifically portfolio variance eq. You should pick 2 firms that you have a certain degree of fam

Dsp, h(t) is an analog IIR filter, with the poles lambda_1 = -1, lambda_2 =...

h(t) is an analog IIR filter, with the poles lambda_1 = -1, lambda_2 = -1+i, lambda_3 = -1-i and no zeros. let h[n] be a digital IIR filter with poles which defined by e^lambda_i a

Define Thermal equilibrium, Thermal equilibrium The definition and measurem...

Thermal equilibrium The definition and measurement of temperature must be logically preceded by the concept of thermal equilibrium and the Zeroth law. To determine operationally wh

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd