Problem:
The pay-back period is the least accurate method of evaluating a capital expenditure. Why is it used so often?
Mini Case: Your organization is going to purchase (lease) a new copy machine. You have scheduled presentations from sales representatives from four competing companies. It is your job to compile a list of questions to ask them. What questions should be on this list? Is this an example of an independent or mutually exclusive decision? When it comes down to the final decision, which capital budgeting technique will you select to evaluate the four competing options?