Which of the Following Is a Reason for Firms Not

Multiple Choice

Which of the following is a reason for firms not using the payback method as a guideline in capital investment decisions?

A) It gives an explicit consideration to the timing of cash flows.
B) It cannot be specified in light of the wealth maximization goal.
C) It is a measure of risk exposure and projects the possibility of a calamity.
D) It is easy to calculate and has intuitive appeal.