1.Payback - find how long it takes to recover the initial investment using the cash flows or the discounted cash flows. Rule: If the payback of the project is less than what Corporate requires as a payback period, accept the project. T CF1 ACCUMULATED NEED 0 (80, 000) 25,000 25,000 55,000 25,000 50,000 (30,000) (20,000) 10,000 60,000 50,000 70,000 3 years 20000/50000 3.4 years If the Corporate Payback Period requirement is less than 3.5 Years, should the project be accepted? Yes/No Advantages: 1234S