the traditional payback period technique that is used in capital budgeting analyses . group of answer choices directly accounts for the time value of money is the simplest and oldest formal method used to evaluate capital budgeting projects incorporates risk into the discount rate that is used to compute the payback period considers the discounted value of cash flows beyond the project's payback period always results in maximizing the value of the firm when used to evaluate mutually exclusive projects

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The payback period (PBP) is the traditional method of capital budgeting. It is the simplest and perhaps, the most widely used quantitative method for appraising capital expenditure decisions.

The procedure a company uses to assess potential big projects or investments is called capital budgeting.

  • Companies use capital budgeting to assess large-scale initiatives and investments, such as new buildings or machinery.
  • The procedure is examining the cash flows into and out of a project to ascertain whether the anticipated return reaches a predetermined standard.
  • Discounted cash flow, payback, and throughput assessments are three of the main capital budgeting techniques.

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