Coogly company is attempting to identify its weighted average cost of
Advantages of using the payback period method in the capital budgeting process include its simplicity and ease of use, as well as its ability to quickly identify investments that are likely to offer returns within a short timeframe. Additionally, it can also help prioritize investments by providing an understanding of how much time is required for an investment to provide a return on investment (ROI).
Disadvantages however include its inability to account for cash flows beyond the initial payback period, meaning it does not take into consideration future cash flow benefits which can be generated from longer-term investments. It also does not consider opportunity costs associated with allocating resources towards one project over another nor does it consider the effects of inflation or taxes on the returns of a given project.
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