Payback is the time it takes the cash inflows from a capital investment project to equal the cash outflows, usually expressed in years. It is the length of time before the cash inflows from an investment pay back the investment outlay.
It is often used as a first screening method in investment appraisal.
The payback period of a project is an important determinant of whether to undertake the project.
If cashflows are even,
Payback period (In years) = Initial Investment/Annual cash flow
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