HOW TO CALCULATE PAY BACK PERIOD
WHAT IS PAY BACK PERIOD? Payback period is also known as payoff or pay-out method. Pay back period is the time required to pay back the initial investment from earnings. Pay back period is stateted in years and should not be stated in years and months. Pay back period method evaluates how long it will take to pay backor recover the initial investements. HOW IS PAY BACK PERIOD CALCULATED NOW, there exists two types of investment, there is : 1. An investment that returns the same amount of cash inflows every year. This type of investment rarely exist in real business environment, however, in such a scenario, Pay back period is calculated as under; PAY-BACK PERIOD = initial cost of investment ...