One advantage of the payback period method of evaluating fixed asset investment possibilities is that it provides a rough measure of a project's liquidity and risk.

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The payback period method calculates the length of time it takes for a project to recoup its initial investment. This provides insight into the project's liquidity, as the shorter the payback period, the more quickly the project generates cash flow. It also provides some insight into risk, as a longer payback period may indicate a higher risk project.

One Advantage of the Payback Period Method of Evaluating Fixed