সরাসরি প্রধান সামগ্রীতে চলে যান

Pay back period

Pay back period is a term in accounting and financial management that concerned with any investment for a project and potential period of return back of the investment.  Pay back period is the time length of recovery of investment cost.

Any company may find two or more project for investment for potential benefits. Which project should company select to undertake and what should be reject is determine  by pay back period.

Because of the extreme level of simplicity in pay back period it is more important in financial decision making.  Time value of money is considered in pay back period  unlike Net present value,  Internal rate of return.

In terms of pay back period Opportunity  cost is considered.

Let us consider,  two project A and B,  company is trying to select.  Now the question is what should be select?

The initial investment of project A is 1 core that will save cash 10 luck per year.  Hence,  10 years need to recovery of investment.

Project B need 1 crore of initial investment but there no cash savings.  But yet there have a chance of incremental earning 20 lucks per year.  Hence,  5 years to need to recover the investment cost.

Considering these project B is better to select.

এই ব্লগটি থেকে জনপ্রিয় পোস্টগুলি

How To write novel

How to write novel Writting novel is not an easy task. But some techniques can make it easy.

Hawking radiation

Stephen Hawking says about Black hole that it is not quite black. Rather, it radiates energy from its event horizon. This radiate energy is named as Hawking radiation according to the name of physcist Stephen Hawking. Event horizon is the boundary of black hole from where the minimum effect of black hole exists. Recent discovery of science is Black hole information paradox. According to black hole information paradox, everything engulfed by black hole is displaced and transform into information and these information convert into energy and finally radiates through event horizon of black hole.

Theory of everything

Theory of everything Theory of everything is a predictive theory that yet not realised Theory of everything is a theory of physics that is hope to explain all of the phenomenon of physics by a only one theory. But it is not discovered till now and it is considered as major unsolved problem in physics as well as entire science. Once a day most probably past few centuries an amazing things happened in physics world. Scientists observed that the whole physics is somehow related and a wide range of dependent two major phenomenon of physics. These two phenomenon of physics is Gravity and Quantum filed theory. General gravity is a theoretical framework in physics that basically explains phenomenon in universe specially in large scale objects such as stars, galaxies and cluster of galaxies. On the other hand Quantum field theory focuses on the three fundamental force in universe in both small scale and low mass. The great success of quantum field theory in universe is that ...