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The Basics of Capital Budgeting: Payback Payback break was the earliest Select selection criterion. The select- is a break-even calculation in the sense that ir
The Basics of Capital Budgeting: Payback Payback break was the earliest Select selection criterion. The select- is a break-even calculation in the sense that ir a projedrscash nows come in at the expected rate, project wou the even. The equation is Payback Number of a years prior to TheGseieet D proyecre payback the better the project is. However, payback has 3 main disadvantages: All dollars amerene years are geen weight (2) Cash beyond the payback year are ignored. G) The payback merely indicates when a project sinvestment wil be recovered. There is no necessary relationship between a given paybeck and investor A variant of the regular payback is the dieceunted payback Unike regular payback, the discounted payback considers costs. However, the discounted payback st disregends cash Gselect the payback year. In addition, there is no specne payback rule to justify protect acceptance. Both methods provide informaton about and Quantitative Problem: Bellinger Industrit
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