What are the advantages and disadvantages of payback period?

 Advantages of Payback Period

• No need for detailed analysis
• Simple to calculate and understand.
• Adjusts for uncertainty of later cash flows.
• Biased towards liquidity.

Disadvantages of Payback Period

• Time value of money and risk ignored
• Ad hoc determination of acceptable payback period.
• Ignores cash flows beyond the cut-off date.
• Biased against long-term projects.
  

What is payback period?
What are the other methods of project evaluation?