Payback period

The total period before the cumulative net cash inflows from an investment are sufficient to have fully paid back the initial investment.

All other things being equal, the sooner - or shorter - the payback period, the lower risk and the more attractive the proposed investment appears to be on this measure.

See also

• Incremental cash flows
• Investment
• Internal rate of return
• Net present value
• Payback
• Profitability index
• Return on investment (ROI)