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Calculate the payback period for an investment project that requires an initial investment of $100,000 and is expected to generate annual cash flows of $25,000.
Calculate the payback period for an investment project that requires an initial investment of $100,000 and is expected to generate annual cash flows of $25,000. Discuss the limitations of the payback period as an investment appraisal technique and compare it with other methods such as net present value (NPV) and internal rate of return (IRR). Evaluate the strengths and weaknesses of each method in assessing investment opportunities.
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