What is not a disadvantage of using the Payback Period Method? O Hard to calculate O Ignores time value of money O Uses an arbitrary benchmark Biased against long term project
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- The payback period method has been criticized for not taking the time value of money intoaccount. Could this limitation be overcome? If so, would this method then be preferable to theNPV method?Which of the following are significant flaws with the Payback Period Method? (Select all that apply) A. Biased against long-term projects B. Uses an arbitrary benchmark C. Very rarely used in practice D. Uses accounting profits rather than cash flows E. Ignores Time Value of MoneyWhich are problems of the payback criterion? Check all that apply: It ignores cash flows after the cutoff date. It ignores the time value of money. It doesn't show the value created by a project. It doesn't fully reflect the risk of a project. It uses an arbitrary cutoff value. It is difficult to calculate.
- Which of the following is a disadvantage of the average rate of return method? a. fails to consider the time value of money b. includes the amount of income earned over the entire life of the proposal c. emphasizes accounting income d. difficult to useOne of the benefit of the pay back period is that it focuses on the timing of the project`s benefits and costs, even though it does not adjust the cash flows for the time value of money Select one: True FalseQuestion 1 Which of the following statements is False regarding the payback period method: OA. Use as a tool in making screening decision. OB. The Cash flows after the payback period are ignored. OC. Shorter payback period indicates a more profitable project. O D. Consider the time value of money.
- Which of the following is a disadvantage of the IRR project evaluation method? Question 5Select one: a. It does not take into account the time value of money. b. If there are negative cash flows after positive cash flows, there may be zero or multiple internal rates of return. c. It does not make adequate allowance for risk. d. It focuses on accounting profit rather than cash flow as the source of value.#3 ARR is incorrect. Please answer again - Calculate the payback period for above - Calculate the NPV for aboveOne of the advantages of Internal Rate of Return is: a. Calculations are complex in nature b. It gives the closest rate of return c. It ignores the reinvestment potential d. None of these
- One of the advantages of Internal Rate of Return is: O a. It gives the closest rate of return O b. None of these c. Calculations are complex in nature O d. It ignores the reinvestment potentialThe payback criterion has problem(s) like Select one: O A. It considers the time value of money O B. It ignores the cash outflows or inflows after the payback period and the time value of money O C. It considers the inflows and outflows after the Payback Period O D. It considers all the cash outflows or inflows of the projectn 0 1 2 3 4 5 6 7 8 9 10 A -$250 $60 $970 B -$200 $90 $90 $60 $60 Net Cashflow с -$70 $20 $10 $5 -$50 $60 $50 $40 $30 $20 $10 D -$300 $270 $250 -$129 -$20 $120 $40 E -$90 -$100 -$50 $0 $150 $150 $100 $100