A characteristic of the payback method is that it

Multiple Choice

• Uses the estimated life of the asset in the denominator of the calculation.
• Neglects total project profitability (i.e., profitability over the entire life of the project).
• Uses accrual accounting numbers in the numerator of the calculation.
• Uses the hurdle (i.e., discount) rate in the calculation.
• Cannot incorporate into the calculation the time value of money.