Payback

Related BrainMass Solutions

• Disadvantages of Cash Payback Method

  Payback period for project A is $3,000/ $1,000 = 3 years Payback period for project B is $2,000/ $800 = 2.5 years According to the cash payback method, project B is superior (payback period of 2.5 years against a payback period of 3 years for project

• Use of the Payback Period

  The payback period could be used to determine the payback period in various industry groupings.

• Payback period

  3782 Insight into the payback period method in accounting. What is the payback period method in accounting? Payback Period: The payback period is simply the time taken by the project to return the initial investment.

• Payback Period

  B should be selected as it has a lower Payback period The solution evaluates the cash flows under 2 alternatives using payback method.

• Basic Capital Budgeting

  --The regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem.

• Payback and Net Present Value Methods for Dino Corporation

  Payback period = Initial investment/Expected return per year Investment A Payback period = 100,000/30,000 = 3.33 years Investment B Payback period = 50,000/25,000 = 2 years Investment C Payback period = 30,000/8,000 = 3.75 years Investment

• Payback Period Methid and Discounted Payback Method

  12989 Payback Period Methid and Discounted Payback Method What are the differences between the payback period method and the discounted payback method? Which method is better in valuating investments?

• Payback method

  Under the payback method we select all alternatives which have a payback period less than the cut off payback period. In case the cut off period is now known, we select the project with a shorter payback.

• Dino Corporation

  Payback period = Initial investment/cash flow per year Investment A Payback period = 100,000/30,000 = 3.33 years Investment B Payback period = 50,000/25,000 = 2 years Investment C Payback period = 30,000/8,000 = 3.75 years Investment D

• Under the payback method, which investment should be chosen?

  Under the payback method, which investment should be chosen? b. Why do other methods allow for a better analysis? Payback is the time taken to recover the initial investment. Under payback method we choose the investment with a shorter payback.