The expected amount of time to recover the initial amount of an investment is called the:
A) Interest period.
B) Discounted cash flow period.
C) Budgeting period.
D) Amortization period.
E) Payback period.

Question

Quizplus · Accepted Answer

The expected amount of time to recover the initial amount of an investment is known as the payback period. This period is calculated by dividing the initial investment by the expected net annual cash inflows from the investment. The payback period is a common tool used to evaluate the profitability and risk of an investment, and it is useful in determining whether an investment is worth pursuing.

The Expected Amount of Time to Recover the Initial Amount