Payback period method, finance, Other Engineering

Assignment Help:
Non-discounted cash flow method,

Payback period method
In this method, time value of money is not considered. It takes into account the number of years required to recover the initial investment of a project (Harold Bierman, Seymour Smidt, 2006).
Accept Reject Rule:
Accept the project with lowest payback period.
Reject the project with highest payback period.
Merits:
1. Simple and easy to calculate
2. Less costly to use
3. Less time consuming
De-merits:
1. Time value of money is completely ignored.
2. Does not consider the cash flow generated after payback period.

Related Discussions:- Payback period method, finance

Various cementing materials, The various cementing materials are classified...

The various cementing materials are classified as follows. a) Argillaceous cementing materials b) Calcareous cementing materials c) Carbonaceous cementing materials Argillaceous Ma

Chemistry, what is the role of chemistry in engineering

what is the role of chemistry in engineering

Cash flow diagrams, Cash Flow Diagrams We will use a cash flow approac...

Cash Flow Diagrams We will use a cash flow approach to analyze the flow of money through out a planning horizon. A cash flow occurs when money actually change hands. We will u

Difference amplifier, Difference amplifier: Figure shows how two inputs...

Difference amplifier: Figure shows how two inputs can be subtracted. This circuit differs from previous types with negative feedback in that the non-inverting terminal is not

Casting alloys, Casting Alloys are -             (i) Permanent moulds...

Casting Alloys are -             (i) Permanent moulds are commonly used for the casting of grey iron, aluminum alloys and magnesium alloys.             (ii) Slush Casting

Blade twist - aircraft engine, BLADE TWIST: Rotational velocity and its...

BLADE TWIST: Rotational velocity and its effect on the Angle of Attack depends on the radius of the blade element in question. A blade element near the blade root (hub) will h

Flight dynamics - introduction, In the Aircraft Performance course, the air...

In the Aircraft Performance course, the aircraft was assumed to be in a steady-state (e.g. steady  cruise, climb, turn, glide), with the forces and moments balanced. The subject of

Engineering economices, 2. A contractor has both a 3-cy and a 5-cy shovel i...

2. A contractor has both a 3-cy and a 5-cy shovel in the equipment fleet. Select the minimum size shovel that will excavate 400,000bcy of common earth in a minimum of 130 working d

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd