Many Firms Use the Payback Method as a Guideline in Capital

Multiple Choice

Many firms use the payback method as a guideline in capital investment decisions. Reasons they do so include all of the following EXCEPT

A) it gives an implicit consideration to the timing of cash flows.
B) it recognizes cash flows which occur after the payback period.
C) it is a measure of risk exposure.
D) it is easy to calculate.