Answer
The payback method calculates the time it takes to recover the initial investment in a project through expected future net cash inflows. Its main strengths are simplicity and ease of understanding, making it useful for screening multiple proposals, especially when cash flow predictions for later years are uncertain. However, its weaknesses include ignoring the time value of money and neglecting cash flows beyond the payback period. The discounted payback method can address the first drawback but not the second.
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