Payback period
Definition
In project evaluation and capital budgeting, the payback period estimates the time required to recover the principal amount of an investment. Because the payback period method ignores any benefits that occur after the investment is repaid and the time value of money, other methods of investment analysis are often preferred. See: Internal rate of return (IRR), Discounted cash flow (DCF), and Net present value (NPV)
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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University
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Replacement cost insurance
Insurance that pays out the full amount required to replace damaged property with new property, without taking into account the depreciated value of the property.
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