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Unformatted text preview: company. In practice, companies establish "rules" around payback when evaluating a project. For example, a company might decide that all projects need to have a payback of less than five years. This is also referred to as you have said the cutoff period. Perhaps the greatest strength of the payback method is that it allows executives and managers to get a good feel for how much time will pass before they can recoup their investment. This allows for go, no-go, decisions to be made based on simple cutoff date rules. Acsis LTD (n.d.) retrieved from. http://www.acsis.com.au/Publications/RiskMange/Chapters/Finance/Topic_8.pdf...
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- Spring '11