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Pay-back Period Method Of Capital Budgeting And Evaluation

Pay-back Period Method Of Capital Budgeting And Evaluation:

Pay-back period is the time required to recover the initial investment in a project. It is one of the non-discounted cash flow methods of capital budgeting.

Pay-back period = Initial investment / Annual cash inflows

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Uneven Cash Inflows

Normally the projects are not having uniform cash inflows. In those cases the pay-back period is calculated, cumulative cash inflows will be calculated and then interpreted.

Pay-back Period Method Of Capital Budgeting And Evaluation Pay-back Period Method Of Capital Budgeting And Evaluation Reviewed by Ikpokolo Francis on Friday, May 12, 2017 Rating: 5

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