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Payback period. Payback period in capital budgeting refers to the time required to recoup the funds expended in an investment, or to reach the break-even point. [1] For example, a $1000 investment made at the start of year 1 which returned $500 at the end of year 1 and year 2 respectively would have a two-year payback period.
Discounted payback period. The discounted payback period (DPB) is the amount of time that it takes (in years) for the initial cost of a project to equal to the discounted value of expected cash flows, or the time it takes to break even from an investment. [1] It is the period in which the cumulative net present value of a project equals zero.
Capital budgeting in corporate finance, corporate planning and accounting is an area of capital management that concerns the planning process used to determine whether an organization's long term capital investments such as new machinery, replacement of machinery, new plants, new products, and research development projects are worth the funding of cash through the firm's capitalization ...
A 2015 review in Renewable and Sustainable Energy Reviews assessed the energy payback time and EROI of a variety of PV module technologies. In this study, which uses an insolation of 1700 kWh/m 2 /yr and a system lifetime of 30 years, mean harmonized EROIs between 8.7 and 34.2 were found. Mean harmonized energy payback time varied from 1.0 to 4 ...
Although the payback period is defined by Kerzner as the least precise of all capital budgeting methods because the calculations are in dollars and cannot adjusted for the time value of money. [17] By establishing the payback period within the opportunity management process, project managers may continually assess the project expenditures and ...
A simplified cash flow model shows the payback period as the time from the project completion to the breakeven. In economics and business, specifically cost accounting, the break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has "broken even".
The energy payback time is defined as the recovery time required for generating the energy spent for manufacturing a modern photovoltaic module. In 2008, it was estimated to be from 1 to 4 years [28] [29] depending on the module type and location. With a typical lifetime of 20 to 30 years, this means that modern solar cells would be net energy ...
Payback period for installing a ground source heat pump in a detached residence Country Payback period for replacing natural gas heating oil electric heating; Canada: 13 years: 3 years: 6 years US: 12 years: 5 years: 4 years Germany: net loss: 8 years: 2 years Notes: Highly variable with energy prices. Government subsidies not included. Climate ...