Cash Payback Method

Accounting Dictionary

Cash Payback Method

The cash payback method is a type of capital investment analysis that predicts how soon a company will recoup its original investment.

If I invest $50,000 in a machine I will make an additional $10,000 a year. $50000 divided by $10000 is five. It will take five years for me to get my $50,000 back. Five years is my payback period.

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