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What is the advantage and disadvantage of discounted payback method?

we only know the disadvantages: The cash flows beyond the payback period are ignored..


Discounted payback method?

A discounted payback method is a formula that is used to calculate how long to recoup investments based on the discounted cash flows of the investment. It is a variation of payback period or the time it takes to recover a project investment given the discounted cash flow it has.


A method of evaluating capital investment proposals that ignore present value includes?

using payback period as the primary metric for decision making. The payback period measures the length of time it takes for the initial investment to be recovered from the project's cash flows. This method disregards the time value of money and does not account for the profitability or net present value of the investment.


What are the disadvantages of the discounted payback period?

It's not a direct measure of a project's contribution to stockholder's wealth. You may reject project's that should be accepted when using the NPV analysis (best method used for determining whether or not a project is accepted in Capital Budgeting). Discounted Payback Period AdvantagesConsiders the time value of money Considers the riskiness of the project's cash flows (through the cost of capital) Disadvantages No concrete decision criteria that indicate whether the investment increases the firm's value Requires an estimate of the cost of capital in order to calculate the payback Ignores cash flows beyond the discounted payback periodYounes Aitouazdi: University of Houston Downtown


How to compute discounted payback period?

What is the payback period of the following project? Initial Investment: $50,000 Projected life: 8 years Net cash flows each year: $10,000


Why potentiometer method is an accurate method for measuring potential difference?

Say 'emf' instead potential difference. Because while measuring the same no current is drawn and just balancing the potential across with the potential drop on the balancing length of the potentiometer wire. While balancing the galvanometer shows null deflection. So no current flows through the galvanometer. A perfect balance with the potential difference (EMF) of a cell with potential drop across that particular length.


Compute the payback period for a project with the following cash flows if the companys discount rate is 12 percent Initial outlay equals 450 Cash flows Year 1 equals 325?

3.17 years


In which direction does water potential flow?

Water potential flows from an area of higher water potential to an area of lower water potential.


Ocean flows in regular patterns related to what?

Latitude


Which section is affected by the decision to use either the direct method or the indirect method to prepare the statement of cash flows?

The Operating Activities portion of the Statement of Cash Flows is affected by whether the direct or indirect method is used.


What determines the direction of Electric?

The potential difference. The electrons flows from a lower potential to a higher potential. The electric current flows in the opposite direction. The electric field's direction is always from a higher potential to a lower potential. Its kind of like a waterfall. The water always falls down not up. It goes from a higher potential to a lower potential.


Which electrolyte flows into the cell to initiate depolarization?

potassium The answer of potassium is dead wrong. Sodium is the electrolyte that flows into the cell to initiate depolarization. Potassium flows into the cell during repolarization.