Asked by Kayla Kirkpatrick on Jun 26, 2024
Verified
The payback period is the amount of time for the investment to generate enough net cash flow to return the initial cost of investment.
Payback Period
The duration it takes for an investment to generate an amount of income or cash equivalent to the cost of the investment.
Net Cash Flow
The difference between a company's cash inflows and outflows during a specific period, indicating its liquidity position.
Initial Cost
The amount of money spent to acquire or invest in a significant item, asset, or project at the time of purchase or onset.
- Scrutinize the importance of payback period, internal rate of return (IRR), and net present value (NPV) for making decisions on investments.
Verified Answer
Learning Objectives
- Scrutinize the importance of payback period, internal rate of return (IRR), and net present value (NPV) for making decisions on investments.
Related questions
If Net Present Values Are Used to Evaluate Two Investments ...
When Computing Payback Period,the Date the Initial Capital Investment Is ...
If the Internal Rate of Return (IRR)of an Investment Is ...
If the Internal Rate of Return (IRR)of an Investment Is ...
Two Investments with Exactly the Same Payback Periods Are Not ...