A Disadvantage of Using the Payback Period to Compare Investment

Multiple Choice

A disadvantage of using the payback period to compare investment alternatives is that:

A) It ignores cash flows beyond the payback period.
B) It includes the time value of money.
C) It cannot be used when cash flows are not uniform.
D) It cannot be used if a company records depreciation.
E) It cannot be used to compare investments with different initial investments.