Yahoo Web Search

Search results

1. People also ask

   Why is the payback period important?

   • People and corporations mainly invest their money to get paid back, which is why the payback period is so important. In essence, the shorter payback an investment has, the more attractive it becomes. Determining the payback period is useful for anyone and can be done by dividing the initial investment by the average cash flows.

   Payback Period Explained, With the Formula and How to Calculate It

   www.investopedia.com/terms/p/paybackperiod.asp

   See all results for this question

   How is a payback period calculated?

   • The payback period is calculated by dividing the amount of the investment by the annual cash flow. Account and fund managers use the payback period to determine whether to go through with an investment. One of the downsides of the payback period is that it disregards the time value of money.

   Payback Period Explained, With the Formula and How to Calculate It

   www.investopedia.com/terms/p/paybackperiod.asp

   See all results for this question

   How long is the payback period for a project?

   • This is because, as we noted, the initial investment is recouped somewhere between periods 2 and 3. Applying the formula provides the following: As such, the payback period for this project is 2.33 years. The decision rule using the payback period is to minimize the time taken for the return on investment.

   Payback Period - Learn How to Use & Calculate the Payback Period

   corporatefinanceinstitute.com/resources/financial-modeling/payback-period/

   See all results for this question

   What are the downsides of a payback period?

   • One of the downsides of the payback period is that it disregards the time value of money. The payback period is a method commonly used by investors, financial professionals, and corporations to calculate investment returns. It helps determine how long it takes to recover the initial costs associated with an investment.

   Payback Period Explained, With the Formula and How to Calculate It

   www.investopedia.com/terms/p/paybackperiod.asp

   See all results for this question

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

   www.investopedia.com › terms › p

   • Cached

   Feb 23, 2024 · The payback period is a method commonly used by investors, financial professionals, and corporations to calculate investment returns. It helps determine how long it takes to recover the...

   • Author: Julia Kagan

   • Video Duration: 2 min

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

   corporatefinanceinstitute.com › payback-period

   • Cached

   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.

4. Videos

   • 

     9:55

     youtube.com

     The Payback Method

     Mar 31, 2015

     135.3K Views

   • 

     investopedia.com

     Payback Period Explained, With the Formula and How to Calculate It

     Dec 31, 2008

     0 Views

   • 

     wallstreetmojo.com

     Payback Period - What Is It, Formula, How To Calculate

     Apr 13, 2020

     0 Views

   View all

5. www.sofi.com › how-to-calculate-the-payback-periodHow to Calculate the Payback Period: Formula & Examples

   www.sofi.com › how-to-calculate-the-payback-period

   • Cached

   Aug 3, 2023 · Key Points. • 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.

6. www.wallstreetprep.com › knowledge › payback-periodPayback Period | Formula + Calculator - Wall Street Prep

   www.wallstreetprep.com › knowledge › payback-period

   • Cached

   Feb 5, 2024 · 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. How to Calculate Payback Period.

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

   www.fool.com › accounting › payback-period-formula

   • Cached

   May 10, 2024 · The payback period is the time it will take for your business to recoup invested funds. For instance, if your business was considering upgrading assembly line equipment, you...

8. www.wallstreetmojo.com › payback-Payback Period - What Is It, Formula, How To Calculate

   www.wallstreetmojo.com › payback-

   • Cached

   May 3, 2024 · The payback period is a metric in the field of finance that helps in assessing the time requirement for recovering the initial investment made in a project. It has a wide usage in the investment field to evaluate the viability of putting money in an opportunity after assessing the payback time horizon.

9. www.capitalcitytraining.com › knowledge › payback-periodPayback Period Explained: Definitions, Formulas and Examples

   www.capitalcitytraining.com › knowledge › payback-period

   • Cached

   Oct 17, 2023 · 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.