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The payback method helps firms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the
The payback method helps firms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the payback method: the conventional payback method and the discounted payback method. Which of the following statements indicates a disadvantage of using the traditional payback period for capital budgeting decisions? Check all that. apply. The traditional payback period does not take into account the cash flows produced over a project's entire life. The traditional payback period does not take into account the time vatue of money effects of a project's cash flows. The traditional payback period is calculated using net income instead of cash flows
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