Question

Tom's Turkeys is expanding into the heritage turkey market. Tom estimates it will take him 5 years to recover the initial investment. The length of time Tom must wait to recoup the money is called the

Internal return period.

Discounted cash period.

Required payback period.

Payback period.

Required discounted payback period.

Answer 1

Answer:

Correct Answer – Payback Period.

Payback Period is the period in which the amount invested will be recovered.

Required Payback period, Payback period and Required Discounted payback period all are different.

Required Payback period is the maximum period within which amount invested should be recovered to accept the project; Payback period is the time period in which amount invested in recovered, whereas Required Discounted payback period means the time period within which amount invested should be recovered using discounted Cash inflow.