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Merits of Pay-back Period Method Of Capital Budgeting And Evaluation

Merits of Pay-back Period Method Of Capital Budgeting And Evaluation:

The following are the important merits of the pay-back method:

finance
[Post Image Courtesy of Pong at FreeDigitalPhotos.net]

1. It is easy to calculate and simple to understand.

2. Pay-back method provides further improvement over the accounting rate return.

3. Pay-back method reduces the possibility of loss on account of obsolescence.

About Author Mohamed Abu 'l-Gharaniq

when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries.

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