The payback method measures:

A) the cash flow from an investment.
B) the economic life of an investment.
C) how quickly investment dollars may be recovered.
D) the profitability of an investment.

Payback Method

A capital budgeting technique that calculates the length of time required to recoup the initial investment cost through the net cash flows it generates.

Cash Flow

Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business.

Economic Life

The expected period of time during which an asset remains useful to the owner for generating income or other benefits.