The payback method calculates the amount of time needed to "pay back" or repay the initial expenditure. The time it takes for an investment to create enough cash revenues to cover its associated financial outflow(s), usually expressed in years, is known as the payback period.
The payback technique does not measure how profitable a project will ultimately be; it just focuses on how long it will take to pay back the initial expenditure.
The payback period's primary benefit is its simplicity in calculation and comprehension. The calculations include figuring out the total amount owed on the project till the starting cost is recovered.
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