Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question

What are the benefits and Flaws of Payback Screening?

Expert Solution
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Step 1

The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the expense or initial investment of a venture, or to what extent it takes. Record and reserve chiefs utilize the restitution time frame to choose if speculation is to experience.

Step 2

Shorter paybacks mean increasingly appealing speculations while there is a less attractive quality for longer restitution periods. The payback period is dividing the amount of the investment by the annual cash flow.

 

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