Payback period can be a good measure of personal risk for a buyer.

Question

Quizplus · Accepted Answer

The payback period refers to the length of time it takes for an investment to generate enough cash flow to recover its initial cost. If the payback period is short, it means that there is less risk for the buyer as they will recoup their investment quickly. On the other hand, a longer payback period indicates a higher risk as it takes longer to recover the initial cost. Therefore, payback period can be a good measure of personal risk for a buyer.

Payback Period Can Be a Good Measure of Personal Risk