Good evening Mr Moffat, I need your help on the effect of depreciation on payback period investment appraisal.
During my revision with BPP revision kit I came across a question that calculated the depreciation as a cash flow for computing the cummulative cash flow for the payback period, I am not comfortable with this approach because I don’t think depreciation is a cash flow and should not be a determinant factor in calculating how fast a project’s initial investment is gotten back.