CEO at most of the countries independent television companies are bracing themselves for difficult times. With the economy suffering in the recession, advertisers are cutting their budgets and focusing on the more successful programmes. This is a major concern for commercial channels as advertising is their main source of income. As revenue flows decline, schedulers are looking for ways to boost income or cut costs. Programmes, such as The Wire and Glee, can bring financial success in the short-run attracting extra viewers and generating more advertising opportunities. If these viewers remain loyal over several series, more can be charged for the advertising slots available before, during and after the show. However, when successful series end, finding the next blockbuster becomes a priority; however this does not come cheap. Other more established programmes may struggle and producers and executives will have to look at their budgets to see if it worthwhile keeping these going. The result may be cheaper television, such as reality programmes, or ever more repeats. Television Companys production division, was weighing project proposals for the companys upcoming capital budgeting meetings in October. Five proposals stood out based on their potential to strengthen the divisions innovative product lines and drive future growth. However, due to constraints on financial and managerial resources, executives knew it was possible that the firms capital budgeting committee would approve one projects. In this scenario with the different alternative proposals executives struggling to choose the best investment projects which can yield them good return in specific period further in deciding the capital budgeting decision certain techniques helps the investors to measure the risk rather than profitability. In the other hand profitability also a priority depends on the capital budgeting decision which the investors applies in their decision making.

Requires: 1. Construct the benefits of the payback period for an investment and why this might be considered a measure of risk rather than profitability.