- This topic has 2 replies, 2 voices, and was last updated 3 years ago by
.
Viewing 3 posts - 1 through 3 (of 3 total)
- Posts
The difference between these two is time period and NPV.
In payback period, we see that when positive NPV occurs and that time is payback period.
In NPV method, we find whether the project is giving positive NPV or not. If yes so we go further with the investment decision.
Am I right sir?Yes, if by payback period you mean discounted payback where future inflows are changed to their PVs and compared to the initial outlay to see how long it takes to breakeven in NPV terms.
Ordinary payback tells you the period needed to recoup the initial cash outlay without discounting.
Viewing 3 posts - 1 through 3 (of 3 total)
- The topic ‘Payback period and NPV method’ is closed to new replies.