
PurposeAt first glance, payback is a simple investment appraisal technique, but it can quickly become complex. The straight payback period method is the simplest way of determining the investment potential of a major project. Expressed in time, it tells a management how many months or years it will take to recover the original cash cost of the project—always a vital consideration, and especially so for managements evaluating several projects at once. |
BenefitsThis action list provides instant and helpful guidelines. |
Related SolutionsCalculating Internal Rate of Return Calculating Return on Investment Calculating Return on Shareholders’ Equity |
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AudienceFo managers at all levels |
Learning methodManagement checklist, answers to FAQs, common traps, and suggested action plans. |
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