Investment Appraisal: Payback Method
When businesses the side to make investments to promote the growth of the business, they attempt to calculate the returns on the investment to estimate whether it is worthwhile.
There are several techniques that management may use in performing these calculations regarding investment appraisal. This video will focus on one of these methods known as the payback method. In a nutshell, this estimates the time. In which the investment will pay for itself. In other words, it estimates how long before the business generates additional funds that may be used to pay for the initial investment.
