THE IMPORTANCE OF THE PAYBACK METHOD IN CAPITAL BUDGETING DECISION.

University essay from Blekinge Tekniska Högskola/Sektionen för management

Author: Alaba Femi Awomewe; Oludele Olawale Ogundele; [2008]

Keywords: Capital Budgeting; Payback Method; Payback Period; Net Present Value; Internal Rate of Return; Real Options Approach;

Abstract: It became evident that the payback method is still often used in organizations all over the world despite its criticism by the academicians, making inference from the analysis of companies in Europe, America and Africa. The importance of the payback method, which includes but not limited to its simplicity, liquidity and risk assessment have made the method to be gaining more awareness in appraising investment opportunity by practicing manager.

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