Payback period The article explains the payback period, a method to determine the time needed for an investment to recover its initial cost through profits. It emphasizes the importance of understanding finance and investment concepts, particularly for those with limited financial knowledge. The payback period method is noted for its simplicity and speed, but also its limitations, such as ignoring the time value of money and cash flows beyond the payback period. The article differentiates between traditional and discounted payback periods, with the latter offering a more realistic approach, and provides examples and explores their advantages and disadvantages. https://iimskills.com/payback-period/