Definition of Payback period:
Time required to recover an investment or loan.
The payback period refers to the amount of time it takes to recover the cost of an investment. Simply put, the payback period is the length of time an investment reaches a break-even point.
The desirability of an investment is directly related to its payback period. Shorter paybacks mean more attractive investments.
The length of time required for an investment to recover its initial outlay in terms of profits or savings.
How to use Payback period in a sentence?
- Account and fund managers use the payback period to determine whether to go through with an investment.
- You should make a special note of the last day of any payback period so that you are sure to not miss it.
- If insulation costs $110 and saves $55 a year, its payback period would be two years.
- The payback period refers to the amount of time it takes to recover the cost of an investment or how long it takes for an investor to reach breakeven.
- The payback period is calculated by dividing the amount of the investment by the annual cash flow.
- I wondered what the payback period was on the item and if they would be able to give back what they had taken from me.
- Shorter paybacks mean more attractive investments while longer payback periods are less desirable.
- If you take loan from the bank, the bank will give you a payback period which is the amount of time you have to pay back the loan in full.
Meaning of Payback period & Payback period Definition