Daniel Jassy, CFA, is an Investopedia Academy instructor and the founder of SPYderCRusher Research. He contributes to Excel and Algorithmic Trading. Suzanne is a content marketer, writer, and ...
Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of ...
Imagine investing in a promising project, only to realize years later that it’s taking far longer than expected to recoup your initial outlay. Wouldn’t it have been invaluable to know upfront how long ...
Capital budgeting decisions are among the most important decisions a business owner or manager will ever make. Which assets to invest in, which products to develop, which markets to enter, whether to ...
The payback method of evaluating capital expenditure projects is very popular because it's easy to calculate and understand. It has severe limitations, however, and ignores many important factors that ...
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Limitations of Using a Payback Period for Analysis
The payback period refers to the amount of time it takes to recover the cost of an investment. Moreover, it's how long it takes for the cash flow of income from the investment to equal its initial ...
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