The payback period is the time taken to recover the initial investment. So a £1m investment that will make a profit of £200,000 a year has a payback period of five years.
What is a payback period?
How do you compute the Cash Payback period?
What are the Payback Period for both projects?
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ROT measures the payback from investment in people; it shows whether managers are hiring the right people and how effectively they use them to achieve business success.
In business decision-making, payback means the number of years before the cash invested in a project is returned. It involves the cash flows from the project but generally the cash flows are not discounted to reflect the time value of money.
The payback period (without discounting the future cash flows) is exactly 1 year.
A PEG payback period of six years, for example, means that it would take six years for an investor to recoup the price paid now for $1 of corporate earnings (the P/E ratio).
DISCOUNTED PAYBACK - the period of time required to recover initial cash outflow when the cash inflows ...
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Discounted Payback definition :
The length of time needed to recoup the present value of an investment.
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Definition: Payback period is an investment appraisal technique that looks at the amount of time it takes an investment project to recover the initial money that was laid out.
Payback Period The time taken to recover the investment on a project.
Payback Period. The length of time it takes to recover the initial cost of a project, without regard to the time value of money.
Penny Stock. Low-priced, often speculative issues usually selling at less than $1 per share.
payback period - The number of years required for an organization to recapture an initial investment. This may apply to an entire business operation or an individual project.
Payback Period. The length of time it will take for an investor to recoup his cash outlay. Often used as a quick way to analyze an investment, usually in personal property. For example, a new machine will cost you $10,000.
Payback period: A capital budgeting performance measure that estimates the period of time required to recoup the initial investment in the asset.
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Payback Period: Payback period is the length of time that it takes to receive cash flow and other economic benefits from an investment that is exactly equal to the initial cash investment.
Payback is calculated by dividing the initial investment by the annual cash inflow. The earlier illustration for Greenspan has a payback of approximately 3.9 years ($500,000/$128,000 = 3.9).
- Payback financing of the true market value of the franchise. Royalty payments can be either fixed amounts, based on percentage of gross sales, or based on a sliding scale, with graduated breakpoints.
Rules of Operation (see Operations Manual) ...
The payback period is a measure of how long it takes for a project or investment to repay any initial outlay.
The payback method is also called the payback period. It is the measure of time it will take to recoup, in the form of cash inflows from operations, the initial dollars of outlay. It is not a profitability measure.
The Cash Payback Method has a number of weaknesses:
It ignores the time value of money;
It is biased in favor of projects that have a short payback period; ...
Discounted payback period rule
An investment decision rule in which cash flows are discounted at an interest rate and then one determines how long it takes for the sum of the discounted cash flows to equal the initial investment.
All costs and payback figures are in U.S. dollars and can vary greatly depending on your house and budget.
Fischel, Daniel. Payback: The Conspiracy to Destroy Michael Milken and His Financial Revolution. New York: Harperbusiness, 1995.
Payables Related: Accounts payable Payback The length of time it takes to recover the initial cost of a project, without regard to the time value of money.
Real return The actual payback on an investment after removing the effect of inflation. Real time A real-time stock or bond quote is one that states a security's most recent offer to sell or bid (buy).
payback The break-even point of an investment. payback period The amount of time needed to break even on an investment. paydown The repayment of part of an outstanding loan balance.
Discounted payback The length of time needed to recoup the present value of an investment.
^ Shaw, R and Merrick (2005) Marketing Payback, FT Prentice Hall, pp 450-463
^ Gartner (2004) The Future of Marketing Automation Arrives With MRM, 9 April 2004
^ as above
^ Shaw, R. and Kotler, P.
Like Net Present Value and Payback, the profit contribution concept has its origins in economics whereas full-cost costing comes from accounting.
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.
Why should any student who is studying hard and working hard, and building up a huge debt in the process, spend what little available time they have left slaving away for someone else with minimal payback? The answer is simple.
In other words, you'll get a "payback in 15 years." Consider a corp that earned $15 million last year and had earnings per share of $15 with 1.5 million shares outstanding.
A rating of a company's credit (ability to payback debt), usually by a third party credit agency.
Credit Loss
A loan receivable that has proven uncollectible and is written off.
Notice that this is a 1000 year payback which seems rather long! (It would take 1000 years to earn back what you paid for the bond - after that though it would all be "gravy" as they say.) In the limit at a 0% interest rate the value of a perpetuity ...
Among the creditors and shareholders, which has the higher payback priority?
In what situation would creditors not be fully paid what they're owed?
What is the minimum amount of money that the shareholders may receive in liquidation?
Because lending out a mortgage is a risk to the mortgagee, because they might not get a smooth repayment, they will make a series of credit checks on the borrower to determine their reliability and likelihood of payback.
Required compensation for the new business owners.
Capital expenditures anticipated in the near term.
Payback period on the business buyer's down payment.
Debt service coverage ratio expected by the lenders.
An investment decision rule in which the cash flows are discounted at an interest rate and the payback rule is applied on these discounted cash flows.
Discount factor
Present value of $1 received at a stated future date.
If you drive, you can choose to use the actual cost method to compute your vehicle costs; however, this generally involves a great deal of recordkeeping for very little payback.
The price of an options contract; also, in futures trading, the amount the futures price exceeds the price of the spot commodity. Related: inverted market premium payback period Also called break-even time, ...
Feasibility study - Evaluation of a contemplated project or course of action, according to pre-established criteria. (such net present value, internal rate of return, and payback period) to determine if the proposal meets management requirements.
After all, why else would you want to own a stock if you never received a payback on your investment? Stocks are perpetual-life securities--there's no guaranteed payoff at some maturity date like there is with a bond.
Soft Loan - A loan with generous terms such as lower than usual or no interest, and/or a long payback period.
series that presents the essentials of investment decision-making. This series shows how to evaluate investments, particularly those associated with projects. Part 3 covers the BCR (benefit cost ratio), the MCR (maximum capital at risk), and payback.
Loan: An agreement in which a lender gives money or property to a borrower, who has to repay or return it, with interest, at a specified time. Shakespeare once said: Never lend money without a written agreement specifying ye olde payback terms.
The credit score of the borrower, the LTV, the loan size and payback period, whether the mortgage is a first mortgage or a junior mortgage, and numerous other factors all affect the mortgage rate for a particular loan.
Payback: the number of years which will elapse before the total incoming cash receipts of a proposed project are forecast to exceed the initial outlays.
Notice that this could be quite a sum of money if the taxpayer sells millions of gallons of product. Competitive allowance, paybacks, advertising allowance or subsidies, and profit participation are just a few names given to these agreements.
For straight equity, price higher than that of the last sale or inside market. Related: Inverted market premium payback period. Also called break-even time; the time it takes to recover the premium per share of a convertible security.
Break-even time Related: Premium payback period. Breakout A rise in a security's price above a resistance level (commonly its previous high price) or drop below a level of support (commonly the former lowest price.) A breakout is taken to ...
 See also: Banks, Expense, Payback period, Net present value, Values
  
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