Using the Payback Method to Evaluate Capital Projects Is a Simpler

question 7

Essay

Using the payback method to evaluate capital projects is a simpler method than either net present value or internal rate of return.Answer the following questions relating to the payback method.
Required:
a.What does the payback period measure?
b.How is the payback period calculated when the annual cash flows are equal?
c.How is the payback period calculated when the annual cash flows are not equal?

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Definitions:

Stable Population

A population size that remains consistently within a small range, indicating a balance between birth rates and death rates.

Canadian Residents

Individuals who legally reside in Canada, including citizens, permanent residents, and certain temporary residents.

Canada-U.S. Border

The international boundary between Canada and the United States, stretching over 5,525 miles, including land and water boundaries.

Society's Quality

The overall condition and well-being of a society, often assessed by factors like health, education, and income.