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The principal advantage claimed for the payback method is its:
ASymmetry
BSimplicity
CSeverity
DSecrecy
Answer & Solution
Correct answer: B. Simplicity
1. It is quick and easy to work out.
2. Managers without finance training grasp it.
3. The advantage is simplicity.
_Source: OpenStax Principles of Finance 2e, Chapter 16, How Companies Think about Investing._
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