The statement “investments with longer payback periods are more desirable, all else being equal” is incorrect.
In general, investments with shorter payback periods are considered more desirable than those with longer payback periods, all else being equal. The payback period is the length of time it takes for an investment to recover its initial cost through the cash flows it generates.
There are several reasons why shorter payback periods are typically preferred:

1. Time value of money: Money received sooner is more valuable than money received later due to the potential to reinvest and earn additional returns. Shorter payback periods allow investors to recoup their initial investment sooner and potentially reinvest those funds into other opportunities.
2. Risk: Longer payback periods generally carry higher risk because there is more uncertainty about future cash flows and economic conditions over a longer time horizon. Shorter payback periods reduce the exposure to potential risks and uncertainties.
3. Liquidity: Investments with shorter payback periods provide greater liquidity, as the initial investment is recovered sooner, allowing investors to redeploy their capital more quickly if needed.
4. Opportunity cost: Longer payback periods tie up capital for an extended period, which means investors may miss out on other potentially more profitable opportunities that arise during that time.

However, it’s important to note that the payback period should not be the sole criterion for evaluating investments. Other factors, such as the total profitability (net present value or internal rate of return), risk profile, strategic considerations, and the investor’s time horizon, should also be taken into account when making investment decisions.
In some cases, investments with longer payback periods may be justified if they offer significantly higher overall returns or align with specific long-term strategic objectives. However, all else being equal, investments with shorter payback periods are generally more desirable from a financial perspective.