Payback period

This refers to the time taken to recover an investment.

Although it is relatively simple to calculate, it does not recognise any subsequent income/return, it does not take account of the risk of the investment or of the likelihood that the investment will be recovered or not, it does not recognise the decreasing value of money over time.

Payback period is a term normally found in financial management.

Explore our learning zone to discover more

This entry was posted in . Bookmark the permalink.