BUISENESS MANAGEMENT
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Gives the highest rate of return
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Returns the cost of investment first
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Has the highest total net cash flow
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None of the above
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Detailed explanation-1: -2 Payback Period. PBP is defined by calculating the time needed (usually expressed in years) to recover an investment. Thus, a break-even point of investment is determined.
Detailed explanation-2: -The payback period is the time in which the initial outlay of investment is expected to be recovered through the cash inflows generated by the investment.
Detailed explanation-3: -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.
Detailed explanation-4: -The payback method evaluates how long it will take to “pay back” or recover the initial investment. The payback period, typically stated in years, is the time it takes to generate enough cash receipts from an investment to cover the cash outflow(s) for the investment.