[SOLVED] Advantages and Disadvantages of Payback

Advantages and disadvantages of payback .Payback period is also an effective capital budgeting technique whereby the break-even point for an investment proposal is calculated. When investment is made in a project, there are no profits earned in the initial few years of operation. Profits are earned after the business achieves break even, where the level of investment made in the project becomes equal to the inflow of cash earned over the years. If the initial investment made in a project $150,000 and the cash flows each year is $50,000. Then the payback period as per the above formula is 3 years. At the end of the third year, the company will be able to recover the entire investment that it has made in the project. From the third year onwards the company would be earning profits upon the project. In case of two or more mutually exclusive projects, the management is seen to select the one which has a lower payback period (Baker and English, 2011).Payback period is one of the simplest capital budgeting techniques to appraise a given project. It is easy to use and simple to calculate. Payback period helps managers to understand the time period required to attain liquidity in a given investment proposal. It also helps the management to analyze the risk factor in a given investment proposal. The longer the duration of the project, the higher is the risk factor.Payback period does not take into consideration the time value of money. This is because the method does not take into consideration discounting of future cash inflows to arrive at the present value of net inflow. Payback period helps in understanding the liquidity factor associated with projects ignoring the profitability factor completely. The system takes into consideration only the inflow of cash prior to the payback period and does not consider the cash inflows after it (Bierman and Smidt, 2007).

 

So much stress and so little time? Take care of yourself: let us help you with your task on
[SOLVED] Advantages and Disadvantages of Payback
Get a 20% Discount on this Paper
Get Help Now

Haven’t found relevant content or pressed for time? –Don’t worry,  you have a team of Sociology professionals to help you.

All you need to do is fill in the order form in the upper right corner and upload the files that are crucial for your assignment. Also, don’t forget to specify whether your assignment has to be based upon specific research, theory, method, or program. After that, we will assign the most suitable expert to complete your assignment. You can always chat with your expert and ask any questions you have during the working process.

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Do My Homeworkk
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Economics
Thank you!
Customer 452493, March 16th, 2022
Finance
Excellent. Thnk you
Customer 452443, October 22nd, 2021
Nursing
Good work, professional and beat the deadline. Thank you so very much
Customer 452445, August 24th, 2021
Economics
Although the paper did not make it at the requested time, the writer did reach out to me and asked for a short extension which I was okay with.
Customer 452493, March 16th, 2022
Finance
Wow! I should never have doubted you guys. Thank you for the excellent grade
Customer 452443, August 27th, 2021
Nursing
Great services.
Customer 452443, November 22nd, 2021
Economics
Thank you - much appreciated!
Customer 452493, April 2nd, 2022
Other
Thank you!
Customer 452493, May 29th, 2022
Education
Awesome work, responded well and clarified everything.. Would definitely recommend, great service
Customer 452445, September 8th, 2021
Classic English Literature
THANK YOU SO MUCH!!!! :)
Customer 452493, April 19th, 2022
Philosophy
Thank you! Will definitely use the writer again.
Customer 452443, October 22nd, 2021
Management
Job done to satisfaction. Thank you!
Customer 452443, October 31st, 2021
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat