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  1. Dictionary
    Pay·back pe·ri·od
    /ˈpāˌbak ˈpirēəd/

    noun

    • 1. the length of time required for an investment to recover its initial outlay in terms of profits or savings: "if insulation costs $110 and saves $55 a year, its payback period would be two years"

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  3. www.investopedia.com › terms › pPayback Period Explained, With the Formula and How to ...

    Feb 23, 2024 · The term payback period refers to the amount of time it takes to recover the cost of an investment. Simply put, it is the length of time an investment...

    • Julia Kagan
    • 2 min

  4. corporatefinanceinstitute.com › payback-periodPayback Period - Learn How to Use & Calculate the Payback Period

    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.

  5. www.deskera.com › blog › payback-periodPayback Period: Definition, Formula & Examples - Deskera

    A payback period refers to the time it takes to earn back the cost of an investment. More specifically, it’s the length of time it takes a project to reach a break-even point. The breakeven point is the level at which the costs of production equal the revenue for a product or service.

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  7. www.myaccountingcourse.com › payback-periodPayback Period (PBP) Formula | Example | Calculation Method

    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 earn enough money to pay for itself or breakeven.

  8. www.myaccountingcourse.com › payback-periodWhat is a Payback Period? - Definition | Meaning | Example

    Definition: Payback period, also called PBP, is the amount of time it takes for an investment’s cash flows to equal its initial cost. In other words, it’s the amount of time it takes for an investment to pay for itself. This is an important time-based measurement because it shows management how lucrative and risky an investment can be.

  9. www.freshbooks.com › hub › accountingWhat Is a Payback Period? How Time Affects Investment Decisions

    Mar 29, 2023 · Payback Period = Investment/Annual Net Cash Flow. (the answer is expressed in years) The above equation only works when the expected annual cash flow from the investment is the same from year to year. If the company expects an “uneven cash flow”, then that has to be taken into account.

  10. www.fool.com › accounting › payback-period-formulaUnderstanding the Payback Period and How to Calculate It

    May 10, 2024 · The payback period is the amount of time it takes a business to recoup invested funds or reach a break-even point. It is particularly useful when deciding...

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