The 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 number of years required for a project's cumulative cash inflows to recover its original investment. The other options 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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