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The cash payback method of capital investment analysis is one of the methods referred to as a present value method.
Cash Payback Method
A capital budgeting technique that calculates the time required to recoup the cost of an investment based on its expected cash flows.
Capital Investment
Funding provided to a business entity to purchase physical assets, like equipment or buildings, or to use in operations to stimulate growth.
Present Value Method
A financial calculation that determines the current worth of a future stream of cash flows, discounted at a specific rate.
- Familiarize with the variety of methods used in evaluating capital investments, categorizing them into present value and non-present value techniques.
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Learning Objectives
- Familiarize with the variety of methods used in evaluating capital investments, categorizing them into present value and non-present value techniques.
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