Number of years forecasted to recover an original investment is classified as________?
Correct answer: A. Payback period
- A. Payback period
- B. Forecasted period
- C. Original period
- D. Investment period
Explanation
The payback period is the time required for a project's cumulative cash inflows to recover its initial investment. The other terms are not standard capital-budgeting measures.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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