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

Aeroengine - axial flow compressor , An axial-flow air compressor consists ...

An axial-flow air compressor consists of 10 rotor/stator stages each built from p gblades of identical cross-section and designed such that the axial velocity is constant throughou

Modified accelerated cost recovery system , Modified Accelerated Cost Recov...

Modified Accelerated Cost Recovery System (MACRS) Although SLN is the most commonly used depreciation method in the U.S. for purpose of financial reporting, MACRS is the only

300 X zoom lens, How to calculate the field of views

How to calculate the field of views

Hospital inspections - fire protection engineering, Hospital Inspections - ...

Hospital Inspections - fire protection engineering: There are a number of sections in NFPA101 that deal with health care premises, some for existing buildings and some for new

Accurate design of heat transfer systems, Hollow cylinders are useful build...

Hollow cylinders are useful building structures commonly used for both industrial and domestic purposes. Tanks, cars and some transport machineries are all applications of inner-in

Fundamentals of lift and drag , Lift and drag are merely the resolved compo...

Lift and drag are merely the resolved components in specific directions of a resultant aerodynamic force caused by the relative velocity V of the vehicle through the air. If al

Thermodynamics.., Steam enters in the turbine at 6 MPa and 450 deg C and ex...

Steam enters in the turbine at 6 MPa and 450 deg C and expands at some intermediate pressure 60 % of steam is extracted and remainder expands to 10 kPa at this Investigate the effe

Plaster molds, Plastic molds are made of plaster of Paris (gypsum) or calci...

Plastic molds are made of plaster of Paris (gypsum) or calcium sulphate, talc and silica flour is added in the plaster of Paris to improve strength and to control the time required

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