Question 1
What does the payback period measure in investment appraisal?
Question 2
Why might a business prefer a project with a short payback period?
Question 3
A business invests $12,000$ in a machine. It will generate net cash inflows of $3,000$ per year. What is the payback period?
Question 4
A project costs $15,000$. It returns $5,000$ in year 1, $6,000$ in year 2, and $4,000$ in year 3. What is the payback period?
Question 5
Which statement best describes a limitation of the payback period method?
