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

Derivatives- vertical spread, Let C (K ) denote a European vanilla Call opt...

Let C (K ) denote a European vanilla Call option with strike price K . Assume that all options are identical except for strike price, and strike prices satisfy K ??Question 1 [5 m

Time value money, I want to buy a car. The Msrp is $31,000. I pay $516 per ...

I want to buy a car. The Msrp is $31,000. I pay $516 per month for five years. The quoted apr is 6.9%. I put down $800. How much did I pay for the car?

Basic principles - propeller, BASIC PRINCIPLES : The purpose of a prope...

BASIC PRINCIPLES : The purpose of a propeller is to convert the power developed by the engine into a useful force called 'Thrust'. This force must be equal to and opposite in

Aaa, Let C(K) denote a European vanilla Call option with strike price K. As...

Let C(K) denote a European vanilla Call option with strike price K. Assume that all options are identical except for strike price, and strike prices satisfy (K1) What are the no-

Salvage value Terminal cash flows, Terminal cash flows Salvage value Sal...

Terminal cash flows Salvage value Salvage value (SV) is the most common example of terminal cash flows. Salvage value may be defined as the market price of an investment at the

Railway inspections - fire safety management, Railway Inspections - fire sa...

Railway Inspections - fire safety management: Railway premises can be anything from small open air stations to large underground complexes and the fire safety measures that ar

International finance, at the beginning of year 1 the terranian central ban...

at the beginning of year 1 the terranian central bank conducted k100 million of dollar selling/terranian kwacha buying intervention. The intervention was undertaken at the rate of

Thermodynamics, A methane-fired microturbine based on the regenerative gas ...

A methane-fired microturbine based on the regenerative gas turbine cycle employs a centrifugal compressor with a polytropic efficiency of 85%, a radial inflow turbine with a polyt

Thin-film ic, THIN-FILM IC: Unlike the monolithic IC's, which are forme...

THIN-FILM IC: Unlike the monolithic IC's, which are formed within a semiconductor material (substrate), the thin-film circuit is formed on the surface of an insulating substrat

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