Question Detail

AMS 104 Past Questions AMS 104 1 Objective Question

Take CBT

Payback period has an advantage over ARR because

A It is easy to calculate

B It ignores time value of money

C It enables investors to select project with minimum recovery time

Correct Answer

D It uses profit after tax

Option C is the correct answer.

The Payback Period explicitly emphasizes liquidity and risk reduction by measuring how quickly the original capital expenditure can be recovered.

Consider what metric measures how fast an investment recovers its initial cost.

Course: AMS 104

Topic: Past Questions AMS 104 1

Type: Objective

Difficulty: Not specified