Reply to the statement below in 100 words or more about payback period
The Payback period is the length of time necessary to recover the entire cost of an investment from the resulting annual net cash flows. (Financial Accounting 17th ed.)An investment project is either accepted or rejected on the basis of payback period. With the payback method it states the promise of a quick recovery of the initial investment can be desirable. If a payback period is shorter or equal to managements wanted payback period the project can be accepted otherwise rejected. The formula for the payback period=d is when then net annual cash flow is even the project of the payback period can be computed by a formula. Payback period equals Investment Required/Net Annual cash inflow. (accountingformanagement.org)
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