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Advantage of payback period method

Payback Period Investment Appraisal Technique This is the method of investment appraisal based solely on cash flows and not profit. The payback period shows the number of years over which the investment would be recouped and measures how fast the investor can recover his/her initial investment.

Advantages of Payback period:

  • It is simple to calculate and understand
  • It least exposes
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