Payback Period
Also called: payback, discounted payback
The payback period is how long a project takes to return its initial investment. It's theoretically poor — it ignores the time value of money and everything that happens after payback — and it survives everywhere because it's intuitive and proxies for risk. Used as a screen alongside NPV it's harmless; used alone it systematically rejects long-dated projects that create the most value.
Formula
Payback period = Initial investment ÷ Annual cash inflow
Where this is taught
Definitions are the trailer. These free levels turn Payback Period into something you play — one bite-size lesson, with worked examples, a quiz and XP.