Without using formulas, provide a definition of discounted payback period.

Discounted Payback

A payback period calculation that takes into account the time value of money by discounting each of the cash flows from the project at a particular rate before it sums them to determine the break-even point.

Payback Period

The time required for the return on an investment to "pay back" the sum of the original investment, commonly used as a measure of investment risk.

Grasp and enact various financial techniques for capital budgeting, encompassing Net Present Value (NPV), Internal Rate of Return (IRR), Profitability Index (PI), and Payback Period.
Gain insight into the advantages and limitations of diverse project evaluation approaches.

Verified Answer

Kavya MayechaJun 25, 2024

Final Answer :

A project analysis tool that measures the acceptability of a project by determining the length of time required for an investment's discounted cash flows to equal its initial cost.

Learning Objectives

Grasp and enact various financial techniques for capital budgeting, encompassing Net Present Value (NPV), Internal Rate of Return (IRR), Profitability Index (PI), and Payback Period.
Gain insight into the advantages and limitations of diverse project evaluation approaches.

Without using formulas, provide a definition of discounted payback period.

Definitions

Learning Objectives

Learning Objectives

Related questions