What is qualities of pay back method, Financial Management

Assignment Help:

Q. What is Qualities of Pay Back Method?

Qualities of Pay Back Method:-

(i) Simple: - The most important merit of this method is that it is simple to understand and easy to compute.

(ii) Suitable for Firms Suffering from Liquidity: - This method is very suitable for firms suffering from shortage of cash for the reason that emphasis in this method is on quick recovery of the original investment.

(iii)Appropriate in case of Uncertain Conditions: - This method is very appropriate where the long term outlook is extremely uncertain and risky.

(iv) Importance to Short-Term Earnings: - This method is useful for firms which lay more emphasis on short-term earnings rather than the long-term growth.

(v) Superior to ARR Method: - It is superior to ARR method for the reason that it is based on cash flow analysis.


Related Discussions:- What is qualities of pay back method

Calculate actual returns using the dividend discount model, You've just won...

You've just won a huge $100 million lottery.  You've decided to invest your winnings in the following way:  $30 million in real estate,  $30 million in  corporate bonds and $40 mil

Explain life insurance in detail, Question 1 Insurance is protection again...

Question 1 Insurance is protection against possible financial loss. Explain life insurance in detail Question 2 Mutual funds are a composite of stocks, bonds, and securities,

Credit enhancement of asset-backed security, Credit enhancement of an...

Credit enhancement of an asset-backed security implies the existence of support for one or more of the bondholders in the structure. Credit enhancement levels var

Criticize the flexible exchange rate regime, Criticize the flexible exchang...

Criticize the flexible exchange rate regime from the viewpoint of the proponents of the fixed exchange rate regime. If exchange rates are fluctuating very frequently, that may

Cash dividends factors that decided by stockholders, What are some of the f...

What are some of the factors that common stockholders consider when deciding how much, if any, cash dividends they desire from the corporation in which they have invested? Gene

Chi square test as a test of independence, Chi Square Test as a Test of Ind...

Chi Square Test as a Test of Independence In real life decision making, managers often have to know whether the differences between the proportions observed from a number of sa

Under what circumstances is a warrant''s value high, Under what circumstanc...

Under what circumstances is a warrant's value high ?  Explain. A warrant's value would be elevated when the stock price, time to expiration, and/or expected stock price volatil

Financial mangement enviroment, 1. role financial intermediaries 2. nature ...

1. role financial intermediaries 2. nature and role of money markets

Describe the basic career stages, Q. Describe the basic Career stages? ...

Q. Describe the basic Career stages? The proper way to analyze and discuss career is to look at them as made up of stages. We can identify five career stages that people most p

Calculate the new interest rate and excel function pv, Continuing growth of...

Continuing growth of the company has required that we issue the company''s corporate debt soon. As you know, in 6 months we plan to issue $10 million worth of 20-year corporate bon

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