Question

The payback period provides information to managers that can be used to help a.control the risks associated with the uncertainty of future cash flows. b.minimize the impact of an investment on a firm's liquidity problems. c.control the effect of the investment on performance measures. d.control the risk of obsolescence. e.All of these choices are correct.

Answer 1

e. All of these choices are correct.

Step-by-step explanation:

The payback period is the time that takes an investment to reach the break-even point. In other words, it is the amount of time that it takes an investor to pay back for the investment, hence the name.

The payback period results from dividing the amount of investment by the estimated cash flow from the investment.

During this period, the manager of an investment can carry out all of the activities listed in the question.