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the payback period method has been criticised for not taking the time value of money into account. In modern finance, time value of money concepts
the payback period method has been criticised for not taking the time value of money into account. In modern finance, time value of money concepts play a central role in decision support and planning since the money to be received or paid at some time in the future should be treated as having less value, today, than an equal amount actually received or paid today. Could this limitation be overcome in payback period method? If so, would this method then be preferable to the NPV method? Please share your thoughts based on academic literature.
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