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

Design structure matrix, what are the types of interactions in the design s...

what are the types of interactions in the design structure matrix?

Tubular joint fatigue, tubular joint root fatigue criteria and creteria abo...

tubular joint root fatigue criteria and creteria about tubular joint fatigue for inersid weld toe welded from both side

Chemistry, what is the role of chemistry in engineering

what is the role of chemistry in engineering

LAVOISIER LAPLACE''S LAW, GIVE EXPLANATION HOW THIS IS USEFUL IN APPLICATIO...

GIVE EXPLANATION HOW THIS IS USEFUL IN APPLICATION OF THERMODYNAMICS TOWARDS CHEMICAL PROCESS

Ten principles of engineering economic analysis, Ten Principles of Engineer...

Ten Principles of Engineering Economic Analysis 1. Money has a time value. 2. Make investments that are economically justified. 3. Choose the mutually exclusive investment alt

Fibre optics communications, explain the fibre optic communication system w...

explain the fibre optic communication system with block diagram

Heat transfer, A heat recovery device involves transferring energy from hot...

A heat recovery device involves transferring energy from hot flue gases passing counter currently through an annular region to pressurized water flowing through the inner tube of t

Telecom engg, the project those see in the matlab project which in the voic...

the project those see in the matlab project which in the voice of different birds

Limiting travel distances - means of escape, Limiting travel distances - Me...

Limiting travel distances - Means of Escape: Some buildings, or parts of buildings, do not have alternative exits and do not have protected escape routes leading to a place of

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