When a small business invests in new capital, the owners often want to know when they can expect to recover the costs of that investment. In capital budget accounting, the payback period pertains to ...

What Is a Payback Period? The payback period is the amount of time (usually measured in years) it takes to recover an initial investment outlay—as measured in after-tax cash flows. For example, if a ...

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 ...

Imagine you bought a vending machine for $2,000. This vending machine made you profits of $100 a year, after all expenses. It would take 20 years to recoup your initial investment. The amount of time ...