Discounted payback

Discounted Payback definition :
The length of time needed to recoup the present value of an investment.
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However, the discounted payback period is a little over 1 year because the first year discounted cash flow of $4545 is not enough to cover the initial investment of $5000. The discounted payback period is 1.

DISCOUNTED PAYBACK - the period of time required to recover initial cash outflow when the cash inflows ...
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Discounted payback period rule
An investment decision rule in which cash flows are discounted at an interest rate and one determines how long it takes for the sum of the discounted cash flows to equal the initial investment.

Discounted payback is a way of calculating the payback period while taking into account the 'time value' of money.

Discounted payback The length of time needed to recoup the present value of an investment.

In contrast to an NPV analysis, which provides the overall value of an project, a discounted payback period gives the number of years it takes to break even from undertaking the initial expenditure.

Bailout Payback Method Payback Period (in accounting)
Discounted Payback Period (in accounting)
Payback Reciprocal (in accounting)
Capital Budget (finance term) ...

See also: Payback, Discounted cash flow, Time value of money, Payback period, Time Value