The Payback Period Is Based on a Net Present Value

question 130

True/False

The payback period is based on a net present value of cash flows.

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Definitions:

Sponsor

An entity or individual that supports an event, activity, person, or organization financially or through the provision of products or services.

Geometric Average Rate

The average compound return per period over a time span, useful for comparing different investments or portfolios.

Compounding

The process where the value of an investment increases because the earnings on an investment, both capital gains and interest, earn interest as time passes.

Return

The profit or loss derived from an investment over a certain period, expressed as a percentage of the investment's initial cost.