discounted payback period

Definition

Timeframe required to regain the value of discounted cash flow, so that it equals the value of the initial investment. The formula to calculate this figure is: Payback Period (Year before recovery + unrecovered cost at the start of the year/cash flow during the year).

Use this term in a sentence

You may want to try and put yourself in a discounted payback period so that you know things will get done.

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Banks utilize a discounted payback period in loan situations so that there is no issues with due times for payments on the loan itself.

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When the company accountant looked at the discounted payback period for the new chicken processing equipment on the ledger he saw that he wrote a cost of $12 million dollars at the beginning of the year for the upgrade and company average revenue was $6 million a month giving him 3 months (1 month + $12 million/$6 Million)

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