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What are the benefits and Flaws of Payback Screening?

Business Its Legal Ethical & Global Environment

10th Edition

ISBN:9781305224414

Author:JENNINGS

Publisher:JENNINGS

Chapter13: Contracts And Sales:performance And Remedies

Section13.1: Defenses In Contract Formation

Problem 3CQ

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What are the benefits and Flaws of Payback Screening?

Expert Solution

Step 1

The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the expense or initial investment of a venture, or to what extent it takes. Record and reserve chiefs utilize the restitution time frame to choose if speculation is to experience.

Step 2

Shorter paybacks mean increasingly appealing speculations while there is a less attractive quality for longer restitution periods. The payback period is dividing the amount of the investment by the annual cash flow.

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