What do we mean by the payback period for an investment

Reference no: EM131913142

Problem

What do we mean by the "payback period" for an investment? How is this calculated? Would we prefer a larger or smaller number for this metric? What does it represent? Does this calculation implement financial discounting (i.e., does it consider the time value of money)?

Can anyone explain the metric known as "Accounting Rate of Return"? Does this calculation implement financial discounting (i.e., does it consider the time value of money)?

Reference no: EM131913142

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