number of years required to recover the original investment.
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Open it Payback period is the expected number of years required to recover the original investment.
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Subject 3. Investment Decision Criteria ) 4 = 0
Since it is difficult to determine by hand, the use of a financial calculator is needed to solve for IRR.
The IRR for Project A is 18.32% and for Project B is 15.03%.
Payback Period
<span>This is the expected number of years required to recover the original investment. Payback occurs when the cumulative net cash flow equals 0.
Decision rules:
The shorter the payback period, the better. A firm should establish a benchmark payb
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