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What information does the payback period provide? A project's paytuck period (AB) indicates thin number ef years required for a pregect to recover its initial
What information does the payback period provide? A project's paytuck period (AB) indicates thin number ef years required for a pregect to recover its initial investment usinu its operating cash flows. As the theocetical soundness of the conventional (undiscounted) FE techripue was craticised, the model was mosifid to licorporate the time value of money-adjusted opesating cash faws to create the discounted saybuck method, While both payback models continue ta reflect faulty racking criteriat, they do provide important (trieful) infeematien regarding a project's llauldity and richiness. In oeneral, the the payback, other things censtant, the oivater the project's figulsty. Sugposte vou are evaluating a project witl the 4 epected futurf cash intiows thown in the frllowing tabie vour boss has asked rod to calculate the 2is0. vela. Ch 10. Assignment - The Basics of Capital Budgeting: Evaluating Cash Hows If the prolectit wolghted average cost of copzal (Wacc) is in, the profect's NPV (rounded to the nearest dollar) is: 397,492321,421$353,9533305,350 budgebing dectiont Checr air thet asoln. The paybuck betilod dees not taice the time vahe of moster iete accouns
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