The ________ is the number of years it will take a firm to recover from its initial investment.

Question

Quizplus · Accepted Answer

The payback period is the amount of time it takes for a firm to recoup its initial investment. It is calculated by dividing the initial investment by the annual cash inflows generated by the investment. Therefore, the payback period is the number of years it will take a firm to recover from its initial investment. Choice A, rate of return, refers to the profitability of an investment, and is not the same as the payback period. Choice B, accumulated translation adjustment, is an accounting concept that refers to the unrealized gains or losses on foreign currency translations. Choice C, remittance period, refers to the time frame in which an entity is required to send money to another entity.

The ________ Is the Number of Years It Will Take