Assume you are the new financial manager of the bed mattress firm, The Dream Ltd. The firm has always used payback period to appraise new investments. With your trusty copy of Principles of Corporate Finance to hand, you believe that a different method may be more appropriate for the firm.

Write a report to the owners, reviewing the different methods that can be used in investment appraisal together with their strengths and weaknesses.

Comment on any practical issues that the firm may face in implementing these methods.