Finance · Capital Budgeting
In infrastructure projects, the Payback Period method is often criticized because it:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Requires excessively complex calculations
- 2Overestimates project risk
- 3Ignores the time value of money and cash flows after the recovery period✓
- 4Ignores the initial project cost
Correct answer
Ignores the time value of money and cash flows after the recovery period
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