The length of time required to recover the initial investment in a capital asset is known as the:

Question

Quizplus · Accepted Answer

The payback period is the length of time required to recover the initial investment in a capital asset. It is a simple measure that calculates the time it takes for the investment to generate enough cash flow to recover the initial cost. The rate of return measures the percentage return on an investment, the investment period refers to the time frame during which an investor intends to hold an investment, and the present value period is the length of time it takes to discount future cash flows to their present value. None of these options accurately describe the length of time required to recover the initial investment, making the payback period the best choice.

The Length of Time Required to Recover the Initial Investment