Payback
The payback period method we calculate the period in which the investment is received from the project.
Advantages of Payback
1.Easy to calculate
This method is very easy to calculate and does not involve complex calculation
2. Easy to interpret
This method can easily be explained and interpret . This period can simply explain that how long will it take to recover the investment.
3.suitable in High Risk project
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Disadvantages
1. Limited in scope
it does not take into account all cash flow and only limited cash flows are considered.
2. More focus on recovery
This method put little light on the profitability of the project.
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