Requires an estimate of the yield-to-maturity for long-term bonds. Is equal to the pretax cost of debt times t, where t = income tax rate. Is equal to the pretax cost of debt ÷( 1- t), where t = income tax rate. Is approximated by the firm ' s short-term borrowing rate. Is estimated using the Capital Asset Pricing Model( CAPM).
Question 10. Question: Which one of the following is an advantage of the payback
method? Student Answer: It provides a( rough) measure of risk. It is linearly related to the net present value( NPV) of a proposed project. It considers all possible future cash flows. It applies conventional discounting procedures to anticipated future cash flows. It allows managers to choose between competing projects with
Requires an estimate of the yield-to-maturity for long-term bonds. Is equal to the pretax cost of debt times t, where t = income tax rate. Is equal to the pretax cost of debt ÷( 1- t), where t = income tax rate. Is approximated by the firm ' s short-term borrowing rate. Is estimated using the Capital Asset Pricing Model( CAPM).
Question 10. Question: Which one of the following is an advantage of the payback
method? Student Answer: It provides a( rough) measure of risk. It is linearly related to the net present value( NPV) of a proposed project. It considers all possible future cash flows. It applies conventional discounting procedures to anticipated future cash flows. It allows managers to choose between competing projects with