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Calculate the payback period for an investment project that requires an initial outlay of $80,000 and generates annual cash flows of $25,000 for 5 years.


Calculate the payback period for an investment project that requires an initial outlay of $80,000 and generates annual cash flows of $25,000 for 5 years. Interpret the payback period and discuss its limitations as a capital budgeting tool. Additionally, compare the payback period with other investment evaluation methods.

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