Definition

Cash payback technique

Cash payback technique identifies the time period required to recover the cost of a capital investment from the net annual cash flow product by the investment.

The illustration in the below presents the formula for computing the cash payback period.

Cost of Capital Investment ÷ Net Annual Cash Flow = Cash Payback Period

Share it:  Cite

More from this Section

  • Materiality & Materiality principle
    Materiality refers to the impact of an items’ size on a company’s financial operations. ...
  • Operating activities
    Operating activities refer to cash flow activities that include the cash effects of transactions ...
  • Notes receivables
    Notes receivables are claims for which formal instruments of credit are issued as proof ...
  • Cash receipts journal
    Cash receipts journal refers to a special journal that records all cash received. The ...
  • Cash dividend
    A cash dividend is a pro rate distribution of cash to stockholders. For a corporation ...