The time value of money is ignored by the payback period and the ARR. Explain why this is a major deficiency in these two models.

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asked Jun 19, 2024 121k views

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SageMage · Answer 1 · 2024-06-23T10:38:00+0000

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The payback period is the length of time it takes to recover the cost of an investment or the length of time an investor needs to reach a breakeven point.

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The time value of money is ignored by the payback period and the ARR. Explain why this is a major deficiency in these two models.

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