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The payback period is the time required for an investment to generate enough cash flow to recover its initial cost. It is the simplest capital budgeting metric — shorter is generally better, though it ignores the time value of money.

Hướng dẫn từng bước

1. 1Identify the initial investment amount
2. 2Estimate the annual (or periodic) cash inflows the investment generates
3. 3Simple payback = Initial investment / Annual cash inflow
4. 4For uneven cash flows, cumulate inflows year by year until the investment is recovered

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