Understanding the Payback Period as a Quantitative Tool for Investment Decisions

The video tutorial explains how businesses decide on investment projects using quantitative tools like the payback period. It covers how to calculate the payback period for both constant and non-constant cash flows, and discusses the advantages and risks associated with this method. The tutorial emphasizes the importance of considering business context and potential changes in circumstances that could affect cash flow assumptions.

What challenges might arise when calculating the payback period with non-constant net cash flow?

Discuss the advantages and limitations of using the payback period as a measure for investment decisions.