Payback Period Example

Payback Period Example What Is the Payback Period Individuals and corporations invest their money with the intention of getting it back and realizing a positive return The shorter the payback the more attractive

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 Get up to 1 000 in stock when you fund a new Active Invest account 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 The payback period is a fundamental capital budgeting tool in corporate finance and perhaps the simplest method for evaluating the feasibility of undertaking a potential investment or project

Payback Period Example

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Payback Period Example
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Payback period is the time required to recover the cost of initial investment it the time which the investment reaches its breakeven points It calculates the number of years we need to generated the initial cost of investment Its recovery depends on cash flow only it not even consider the time value of money 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

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 Payback period is the time in which the initial outlay of an investment is expected to be recovered through the cash inflows generated by the investment It is one of the simplest investment appraisal techniques

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The payback period is a simple measure of how long it takes for a company to recover its initial investment in a project from the project s expected future cash inflows It measures the liquidity of a project rather than its profitability Payback Period Example Assume Company XYZ invests 3 million in a project which is expected to save them 400 000 each year The payback period for this investment is 7 and a half years which we calculate by dividing 3 million with 400 000 using the formula shown below Payback Period 3 000 000 400 000 7 5 years

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Payback Period Definition Formula And Calculation Investopedia

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What Is the Payback Period Individuals and corporations invest their money with the intention of getting it back and realizing a positive return The shorter the payback the more attractive

Payback Period Example 3 Project Comparison YouTube
Payback Period Formula And Calculation Examples SoFi

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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 Get up to 1 000 in stock when you fund a new Active Invest account


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Payback Period Example - Payback period is the time in which the initial outlay of an investment is expected to be recovered through the cash inflows generated by the investment It is one of the simplest investment appraisal techniques