What Is Payback Period

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What Is Payback Period. The payback period is the amount of time required for cash inflows generated by a project to offset its initial cash outflow. A payback period is the amount of time needed to earn back the cost of an investment.

Definition Of Net Present Value Financial Calculators Financial Education Financial Problems
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Payback period which is used most often in capital budgeting is the period of time required to reach the break-even point the point at which positive cash flows and negative cash flows equal each other resulting in zero of an investment based on cash flow. Payback period is the length of time that it takes an investment to reach break-even. The payback period is the amount of time required for cash inflows generated by a project to offset its initial cash outflow.

Payback period is the length of time that it takes an investment to reach break-even.

In other words its the amount of time it takes for an investment to pay for itself. It is based on the incremental cash flows from a. It can be used to compare strategies and investments based on projected returns. A payback period is the amount of time needed to earn back the cost of an investment.