Discounted Payback Period Formula and Calculation


What is Payback Period? Formula + Calculator

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What Is a Payback Period?

Payback analysis is a mathematical method finance professionals and investors can use to determine how long it may take to start, complete and pay for a capital project. This method can provide organizations with the payback period and the value of a project. Accountants, investors and other professionals may use this tool in business planning.


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payback: 1 n the act of taking revenge (harming someone in retaliation for something harmful that they have done) especially in the next life Synonyms: retribution , vengeance Type of: retaliation , revenge action taken in return for an injury or offense n financial return or reward (especially returns equal to the initial investment) Type of:.


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• The payback period is the estimated amount of time it will take to recoup an investment or to break even. • Generally, the longer the payback period, the higher the risk. • There are two formulas for calculating the payback period: the averaging method and the subtraction method.


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The one-word payback is a noun and an adjective. 1 It does not function as a verb. The corresponding verb is pay back —two words. 2 So when you get payback from someone, you make them pay back what they owe. In English, we have many compound words similarly derived from phrasal verbs, and the one-word forms almost never gain acceptance as verbs.


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How to use payback in a sentence. requital; a return on an investment equal to the original capital outlay; also : the period of time elapsed before an investment is recouped… See the full definition


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Payback Period How to Use and Calculate It BooksTime

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Discounted Payback Period Definition, Formula, Benefits eFM

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CAC Payback Definition, Examples and FAQs

Payback definition: . See examples of PAYBACK used in a sentence.


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Payback Period How to Use and Calculate It BooksTime

Payback Period: The payback period is the length of time required to recover the cost of an investment. The payback period of a given investment or project is an important determinant of whether.


Discounted Payback Period Formula and Calculation

Payback Period Formula. To find exactly when payback occurs, the following formula can be used: Applying the formula to the example, we take the initial investment at its absolute value. The opening and closing period cumulative cash flows are $900,000 and $1,200,000, respectively. This is because, as we noted, the initial investment is.


Payback Period Advantages and Disadvantages Top Examples

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. For instance, a $2,000 investment at the start of the first year that returns $1,500.


What Is a Payback Period? How Time Affects Investment Decisions

Payback Is a Dog Lyrics: By mistake, I heard / Some news about you / I just turned my head / And closed my ears / It hurt so bad / First, I tried to run (First I tried to run) / I paused a moment.