The time it will take to recoup in the form of cash inflows the initial dollars invested in an investment project is called the ________.
A) payback period
B) accounting rate of return
C) internal rate of return period
D) recovery period

Question

Quizplus · Accepted Answer

The time it takes for an investment project to recoup its initial costs in the form of cash inflows is called the payback period. It is a simple and widely used measure of investment profitability that helps investors and project managers determine how long it will take to earn back their initial investment, and therefore, how risky the investment is. The shorter the payback period, the better, as it means that the investment is generating cash sooner and has a lower risk of not being profitable.

The Time It Will Take to Recoup in the Form