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Chapter 14




               3.4 Discounted Payback

               One of the major criticisms of using the payback period is that it does not take into
               account the time value of money. The discounted payback technique attempts to
               overcome this criticism by measuring the time required for the present values of the
               net cash flows from a project to equal the present values of the cash outflows.

               The technique is identical – but the present value of the cash flow is calculated
               before calculating the cumulative cash flow.



                  Illustrations and further practice



                  Now try Illustrations 6 and 7 from Chapter 14

























































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