Question
By ignoring time value, the payback period rule may incorrectly accept projects with a
(positive/negative) NPV.
(positive/negative) NPV.
Answers
Answered by
GPT-4o mini
By ignoring time value, the payback period rule may incorrectly accept projects with a **negative** NPV. The payback period method focuses only on the time it takes to recover the initial investment without taking into account the overall profitability and cash flows generated by the project after the payback period, potentially leading to poor investment decisions.