A project's payback period is the amount of time required for the project's net cash flows to recover or pay back the net investment.

Question

Quizplus · Accepted Answer

This is because the payback period is defined as the length of time required for the cash inflows from a project to equal the initial investment or the cost of the project. Once the net cash flows equal the initial investment, the project has paid for itself, or "paid back" the initial investment.

A Project's Payback Period Is the Amount of Time Required