This chapter explained two methods to evaluate investments using recovery time, the payback period and break-even time
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This chapter explained two methods to evaluate investments using recovery time, the payback period and break-even time (BET). Refer to QS 11-6 and
(1) Compute the recovery time for both the payback period and break-even time,
(2) Discuss the advantage(s) of break-even time over the payback period, and
(3) List two conditions under which payback period and break-even time are similar.
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...
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1 Recovery time computation Payback Period BreakEven Time 300000 105000 286 years 34 years see ...View the full answer
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