Which of the following options best describes payback?
A) The length of time for cumulated future cash inflows to equal an initial outflow
B) The time taken for time- valued money outputs to exceed inputs
C) The time taken for time- valued money inputs to exceed outputs
D) The length of time for cumulated future cash outflows to equal an initial inflow

Question

Quizplus · Accepted Answer

Payback refers to the length of time it takes for the cumulated future cash inflows to equal an initial outflow. In other words, it is the time it takes for a project to recoup its initial investment. Option B and C refer to the concept of net present value, while option D is the opposite of what payback represents.

Which of the Following Options Best Describes Payback