Tension at Greece Macedonia border

What is the primary focus of the payback concept?

• Evaluating the market value of a project

• Assessing the risk of an investment

• Determining the time required to recover an investment

• Calculating the total profit of a project

Which of the following is a step in calculating payback?

• Estimating future cash flows

• Calculating the net present value

• Determining the internal rate of return

• Assessing the project's market share

What is one advantage of using the payback method?

• It considers the time value of money

• It is simple and easy to understand

• It provides a detailed profitability analysis

• It accounts for all cash flows of a project

Which of the following is a limitation of the payback method?

• It ignores cash flows after the payback period

• It requires extensive data analysis

• It overestimates the project's profitability

• It is too complex for small projects

Why might a company choose to use the payback method despite its limitations?

• It is useful for projects with uncertain cash flows

• It provides a comprehensive risk assessment

• It offers a quick assessment of investment recovery

• It ensures maximum profitability