Drawbacks of payback period Does not consider all of the project’ s cash flows. (500150150150150150(300)00 012345678 This project is clearly unprofitable, but we would accept it based on a 4- year pay back criterionDrawbacks of Payback Period • Does not consider all of the project’s cash flows. • This project is clearly unprofitable, but we would accept it based on a 4- year payback criterion! 0 1 2 3 4 5 6 7 8 (500) 150 150 150 150 150 (300) 0 0