Payback Period Rule at Business Glossary

What is it? An investment decision rule which states that all investment projects that have payback periods equal to or less than a particular cutoff period are accepted, and all those that pay off in more than the particular cutoff period are rejected. The payback period is the number of years required for a firm to recover its initial investment required by a project from the cash flow it generates.

Business Dictionary Term Definition Added By: Victoria

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