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Practice : a)The computation of return on average investment ignores one characteristic of the earnings stream, which is considered in discounting cash flows. What is

Practice :

a)The computation of return on average investment ignores one characteristic of the earnings stream, which is considered in discounting cash flows. What is this characteristic? Why is it important?

b)What are the disadvantages of evaluating an investment using payback period?Why might a company use this methodology despite these disadvantages?

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