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One of the most important weaknesses of using the payback model to evaluate capital investment projects... A. is that it ignores all cash flows after
One of the most important weaknesses of using the payback model to evaluate capital investment projects...
A. is that it ignores all cash flows after the initial capital investment appears to be recovered.
B. is that the model uses a lower cost of capital than required for good time value of money principles.
C.is that it does not work well whenever there is a change in signs in the projected cash flows.
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