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The payback period is a method commonly used by investors, financial professionals, and corporations to calculate investment returns. It helps determine how long it takes to recover the...
Under payback method, an investment project is accepted or rejected on the basis of payback period. Payback period means the period of time that a project requires to recover the money invested in it.
The Payback Period shows how long it takes for a business to recoup an investment. This type of analysis allows firms to compare alternative investment opportunities and decide on a project that returns its investment in the shortest time if that criteria is important to them.
What Is Payback Period? Payback period can be defined as period of time required to recover its initial cost and expenses and cost of investment done for project to reach at time where there is no loss no profit i.e. breakeven point. This is a method to check the viability of projects or investments.
The payback period refers to how long it will take to recoup the cost of an investment. Learn how to calculate payback period, and when and why to use it.
Payback period is a financial or capital budgeting method that calculates the number of days required for an investment to produce cash flows equal to the original investment cost. In other words, it’s the amount of time it takes an investment to earn enough money to pay for itself or breakeven.
What is Payback Period? The Payback Period measures the amount of time required to recoup the cost of an initial investment via the cash flows generated by the investment.