Section outline

  • Many practitioners require that projects repay the invested capital within a predefined period. While it is popular, especially in smaller firms, this payback rule is severely flawed. Still, we present the payback rule and show in detail what implementation challenges we face. While it is interesting to know a project's payback, we should not base investment decisions on this information.

    • This section's reading assignment and review questions are listed below.

    • Reading: Payback Rule Book
      Students must
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    • Quiz: Payback Rule
      Students must
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      Receive a grade