breakeven point. ... A list of interesting business theories.

In simple terms, management looks for a lower payback period. An investment project with a short payback period promises the quick inflow of cash. Payback period method is suitable for projects of small investments. The discounted payback period is a capital budgeting procedure used to determine the profitability of a project. A project with short payback period can improve the liquidity position of the business quickly. Definition: The amount of time for the cash flows generated by an investment to equal its cost. The Bottom Line .

This break-even point … Payback period can be defined as period of time required to recover its initial cost and expenses and cost of investment done for project to reach at time where there is no loss no profit i.e. Payback period is a basic concept which is used for taking decisions whether a particular project will be taken by the organization or not. Payback is often used to talk about government projects or relatively risky projects that are capital intensive. “Industrial and manufacturing companies tend to like payback,” says Knight. It is therefore, a useful capital budgeting method for cash poor firms. Payback time definition is - a time for punishment for something that was done in the past. The payback period is important for the firms for which liquidity is very important. In this way, the payback result shows—or measures—the "break-even point" in time. The business is more likely to use payback period to choose a project. Payback Period (Payback Method) Payback period is the financial budgeting method or capital budgeting method. Payback period is the time required to recover the cost of total investment meant into a business. Payback period is the length of time that it takes an investment to reach break-even. It not worth spending much time and effort on sophisticated economic analysis in such projects. How to use payback time in a sentence.

It calculates the required number of days for investment to produce cash flow equal to the original cost of the investment. When people ask about the payback period their intended question is "When will I get my money back?" Payback Period Definition. The payback period can be a valuable tool for analysis when used properly to determine whether a business should undertake a particular investment. These expenditures and …

Break-Even Point as Unit Volume.



Capital budgeting is the process in which a business determines and evaluates potential expenses or investments that are large in nature. Note that business people also refer to a similar but different concept, the break-even point in business volume, or units sold. In other words, it measures the time of investment to earn enough money for the payment of itself or breakeven.