Payback method

Payback method is capital budgeting method that measures the time it will take to recoup, in the form of expected future cash flows, the net initial investment in a project.

Definitions

According to Cost Accounting by Horngren, Datar, Rajan (14th edition),

Payback method. Capital budgeting method that measures the time it will take to recoup, in the form of expected future cash flows, the net initial investment in a project.