Developments of the payback method

摘要: Abstract In spite of its theoretical deficiencies, the payback (PB) method is commonly used for appraisals capital investments in companies. Sometimes when aspects such as liquidity and project time risk are focused, but it also pure profit evaluations a single criterion. The two main deficiencies PB that does not measure value money correct manner ignores cash flows after period (PP). These can be reduced if maximum acceptable PP chosen somewhat more sophisticated way. practice often fixed value, e.g., three years. some cases limit has been related to economic life investment, shorter than half life. If these rules thumb combined, theoretically evaluation achieved. Such combined based on assumption constant yearly flows. However, developed handle with varying flows, then simplicity lost. Due fact decision situations typically uncertain concerning pattern duration this justify use simple robust even there would advanced analyses.