All else being equal, when using the payback period method to compare the capital investment between several options, a company would choose to invest in the capital asset if which of the following is true?
Group of answer choices
The payback period is the shortest of all of the options.
If the expected accounting rate of return is less than the required rate of return.
The payback period is the longest of all of the options.
If the payback period equals the amount invested.
When using the payback period method to compare capital investments, a company would choose to invest in the capital asset if the following is true:
The payback period is the shortest of all of the options.
The payback period method evaluates how quickly an investment can recoup its initial cost. A shorter payback period is generally preferred because it indicates a quicker recovery of the investment, reducing the risk and improving liquidity.