Which of the below is NOT a weakness of the payback criterio

Which of the below is NOT a weakness of the payback criterion for evaluating capital budgeting projects? Select one: a. It ignores cash flows that occur after the payback date. b. It doesn’t discount future cash flows. c. It is difficult to calculate. d. It doesn’t provide a finance theory based decision rule for accepting or rejecting a project.

Solution

Which of the below is not a weakness of payback criteria for evaluating capital budgeting projects?

d) it doesn\'t provide a finance theory based on decision rule of accepting or rejecting a project.