The time required for the cumulative cash flows from a project to equal zero is called the:
A) profitability index
B) cash flow time frame
C) project life
D) payback period

Question

Quizplus · Accepted Answer

The time required for the cumulative cash flows to equal zero is known as the payback period. This measures the amount of time it takes for the initial investment to be recovered through cash inflows. A shorter payback period is desirable as it indicates a quicker return on investment.

The Time Required for the Cumulative Cash Flows from a Project