*Note : I am going to add my Corporate Strategy Assigment when i was at the university about Financial Investment Methods. Enjoy it :)
PART -5
PART -5
1. THE PAYBACK METHOD
Payback method usually use for the first screening of the projects. When we
investigate the projects, we need to examine these questions at first:
- How long will its pay
back period take after the cost of the project?
- Is there any payback
time on target? Because it will show the acceptance of the project. If its
payback time is more than their estimates, the organization can refuse the
project.
- On the other hand,
there is no only pay back period to estimate the investment appraisals.
Payback is the first step to examine the process. If you know the pay back
period, it will help you to evaluate more detailed project appraisal methods.
- Calculation time of
payback period is very important because we need to calculate the cash
returns of projects and have to know profits before the depreciation.
Calculation of cash flows
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