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
Category: Accounting & Auditing
Previous: ← Standard Cost Accounting System
More from this Section
- Allowance method
The allowance method of accounting for bad debts involves estimating uncollectible accounts ... - Error of commission
When a transaction has been recorded but has been wrongly entered in the books ... - Average-cost method
Average-cost method is an inventory costing method that uses the weighted average unit ... - Prior period adjustment
The correction of an error in previously issued financial statements is known as a prior ... - Just-in-time (JIT) inventory method
Just-in-time (JIT) inventory method is an inventory system in which companies manufacture ...