Whats a “good”payback period?
@Alice Arnault：
This concept actually moves beyond short term investment but also into project decisions so many readers would be familiar with it, but when evaluating businesses and products this requires a different erspective The payback period in business and finance refers to the length of time required to recover the cost of an investment. In simple terms, it's the time it takes for an investment to generate enough cash flows to recover the initial outlay. The calculation for the payback period is quite straightforward: Payback Period = Initial Investment / Annual Cash Inflows For example, if a company invests $1 million in a project that's expected to generate $200,000 per year, the payback period would be: $1 million / $200,000 = 5 years Good? As always in business, it depends The payback period is dependent on the project or business that you are in, the chart below is a good comparison
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Like
Report
Login to post
No comments yet