payback period , it is to pay your period on time jajajaja
Payback period method evaluates any investing activity from how much money it will pay back and how much time it requires to payback in number of years.
YES
In payback period of investment appraisal method all cash inflows and outflows are analysed and find out that in how many years investment proposal will earn the invested money.
Simply put: you don't show investor payback on a balance sheet. By definition, the balance sheet is a statement of financial position; a snapshot of the company's financial situation at a particular moment in time. Nor should you show the investor payback on the Cash Flow, P&L or Changes in Stockholder Equity Statements. We recommend showing the investor payback as a footnote to the P&L Statement, the Cash Flow Statement as well as a paragraph in the text of your document. In the paragraph, we recommend explaining 'how' you calculated the payback, what assumptions you used and over what period of time.
3.17 years
Formula for the Payback Period. Payback period = Initial investment / Annual Cash inflows
advantages of payback period?
Something is meant by the payback period. It is the length of time taken to recover the cost of an investment. This is what is meant by the payback period.
discounted payback period
- the payback period is to dependent on cash inflows which are hard to predict. - The payback period only considers revenue, does not consider profits.
Payback period = Net Investment Annual cash returns
The basic criticisms of the payback period method are that it does not measure the profitability of an investment and it does not consider the time value of money.
payback period
Simple payback method do not care about the time-value of money principle while discounted payback period do take care of this principle in calculation.
No, when calculating the payback period, you do not subtract the salvage value. The payback period focuses on the time it takes for an investment to generate cash inflows sufficient to recover the initial investment cost. The salvage value is typically considered in other analyses, such as calculating the net present value (NPV) or internal rate of return (IRR), but not in the payback period calculation.
we only know the disadvantages: The cash flows beyond the payback period are ignored..
What is the payback period of the following project? Initial Investment: $50,000 Projected life: 8 years Net cash flows each year: $10,000