The cash payback period is computed by dividing the cost of the capital investment by the
A) annual net income.
B) net annual cash inflow.
C) present value of the cash inflow.
D) present value of the net income.

Question

Quizplus · Accepted Answer

The cash payback period is the length of time it takes to recoup the initial cost of the investment. This is calculated by dividing the cost of the investment by the net annual cash inflow. Therefore, the correct choice is B.

The Cash Payback Period Is Computed by Dividing the Cost