Reasons for Choosing Payback Period Assignment Help

Assignment Help: >> Project Investment - Reasons for Choosing Payback Period

Reasons for Choosing Payback Period:

1. It is a quickly applicable parameter and simply understandable through the appraisal authority.

2. The workforce included in executing the project is hard-core technical.

Therefore a simple-to-digest financial concept and the simplicity of payback are best suited for these reasons.

3. The sophisticated DCF based technique has a necessary pre-requisite of assessing the "almost correct" economic life of the group of assets being installed under the project. Now you know the classic nature of power distribution projects in that new assets are blended with old assets, and also the over strenuous nature of work cycle T&D networks are subjected to. You will agree which it is hard to assess the economic life of the projects along with a fair degree of accuracy. Therefore, assuming anything based on bookish concepts will amount to serious oversimplification of facts and lead to misjudgements of techno-economic viability.

For sum-up, the simplicity and simple understandability on the one hand and bottlenecks in exploring certain essential inputs for other techniques makes payback period as the best option for our analysis in power distribution sector.

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