Question
During class we discussed payback periods on investments. See Figure 4 below. Figure 4 indicates that if the payback period for an investment is less
During class we discussed payback periods on investments. See Figure 4 below. Figure 4 indicates that if the payback period for an investment is less than the acceptable payback period that a company is willing to accept, that the company should accept the project. Assume that a project has a payback period that is longer than the acceptable payback period that a company is willing to accept, but the result will be 3 or 5 times more as a financial and nonfinancial return simply due to the time needed to generate the return on the investment (ROI). Would this be a good enough reason for you to accept the project even if it was greater than the acceptable payback period? Please explain.
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