How payback period is calculated and result is interpreted

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Question -

a) ?The Payback Period is a popular technique which is used in Investment Appraisal. Briefly explain (with the use of a simple numerical example) how the Payback Period is calculated and the result is interpreted. State two advantages and two disadvantages of the Payback Period.????

b) ?A company wishes to raise €20m. to finance a major new project which will last for ten years. It is considering an ordinary share issue or an issue of loan stock. Outline the main factors which the company should consider before deciding on the appropriate source of finance.

Reference no: EM133179140

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