The ________ calculates the amount of time required for the discounted expected future cash flows to recoup the net initial investment in a project.

Question

Quizplus · Accepted Answer

The discounted payback method calculates the time it takes for the discounted expected future cash flows to equal the net initial investment in a project. It is a measure of the project's payback period, but takes into account the time value of money by discounting the cash flows. The other options, such as internal rate of return, net present value, and accrual accounting rate-of-return, all provide different measures of a project's profitability or return on investment, but do not specifically calculate the payback period. The opportunity cost of capital is the return that could be earned on an alternative investment with the same level of risk.

The ________ Calculates the Amount of Time Required for the Discounted