Discounted Payback Period - Definition, Formula, and Example The discounted payback period is used to evaluate the profitability and timing of cash inflows of a project or investment In this metric, future cash flows are estimated and adjusted for the time value of money
Discounted payback method - definition, explanation, example . . . The discounted payback method tells companies about the time period in which the initial investment in a project is expected to be recovered by the discounted value of total cash inflow Additionally, it indicates the potential profitability of a certain business venture
Discounted payback period definition - AccountingTools The discounted payback period provides a clear-cut decision rule: if the discounted payback period is shorter than the project’s lifespan or a predefined threshold, the project is deemed acceptable The key disadvantage of the discounted payback period is that it suffers from a higher level of complexity than the standard payback period
Discounted Payback Period: Definition, Formula Calculation - FreshBooks Discounted payback period refers to how long it takes to recoup your original investment Discounted payback period accounts for money’s time value, which makes it a more accurate metric than the regular payback period To calculate discounted payback period, you need to discount all of the cash flows back to their present value
Chapter 9 Smartbook Flashcards - Quizlet True or false: Based on the discounted payback rule, an investment is acceptable if its discounted payback is less than some prespecified number of years The discounted payback is the time it takes to break even in an ____ or financial sense The discounted payback period has which of these weaknesses?
Discounted Payback Period - Definition, Formula, and Example A discounted payback period determines how long it will take for an investment's discounted cash flows to equal its initial cost The rule states that investment can only be considered if its discounted payback covers its initial cost before the cutoff time frame
Discounted Payback Period Calculator | Good Calculators The calculator below helps you calculate the discounted payback period based on the amount you initially invest, the discount rate, and the number of years We have made it easy for you to use and get the right DPP figures:
Discounted Payback: Definition How To Calculate It - BILL You might decide, for example, that an acceptable payback period is three years, and if the investment you’re considering won’t have broken even after that time, it’s not worth pursuing But here’s the thing: The value of money today differs from the value of that money in the future