Which factor is given utmost importance under payback period method?

Question: Which factor is given utmost importance under payback period method?

Under the Payback Period Method, the factor given utmost importance is the expected recovery period of the initial investment. This is the amount of time it takes for the investment to recover the initial outlay and be ‘paid back’ to the investor. The shorter the payback period, the more attractive the investment is considered. This method of evaluation looks solely at the flow of cash, not the discounted present value of future cash flows.

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