The payback period is defined as the amount of time, in years, that it takes
A)the company to provide a required return on the capital asset.
B)for an investment to return the original amount of the capital plus the required rate of return.
C)the company to earn enough profit generated from the capital asset to cover its cost.
D)for an investment to return the original amount of invested capital.

Question

Quizplus · Accepted Answer

The payback period is the amount of time it takes for an investment to return the original amount of invested capital. It does not take into account the required rate of return or the profit generated from the investment. Therefore, choice D) is the best answer.

The Payback Period Is Defined as the Amount of Time