When using the cash payback technique, the payback period is expressed in terms of
A) a percent.
B) dollars.
C) years.
D) months.

Question

Quizplus · Accepted Answer

The cash payback technique measures the amount of time it takes for a project to generate enough cash flow to recoup its initial investment. This period is expressed in years, which makes it easier to understand and compare with other investments. Using a percent or dollar amount would not provide a clear indication of how long it will take to recoup the investment, and using months may be too specific for some projects. Therefore, the best choice is C) years.

When Using the Cash Payback Technique, the Payback Period Is