The time period it takes to recoup the original expense without considering interest payments or other complicating factors is called _____.
A) internal rate of return
B) cash flow
C) simple payback
D) ROI
E) inclusion ratio

Question

Quizplus · Accepted Answer

Simple payback is the method used to calculate the time period it takes to recoup the original expense without considering interest payments or other complicating factors. Therefore, option C is the correct answer. Internal rate of return (A) and ROI (D) consider the time value of money and multiple cash flows, so they are not simply calculating the payback period. Cash flow (B) refers to the amount of cash generated or consumed by a business over a period, but it is not a measure of payback period. Inclusion ratio (E) is a tax term and not related to payback period.

The Time Period It Takes to Recoup the Original Expense