Quiz: Calculating Payback Period for Investments
AQA A-Level Business (7132)
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Welcome! Today, we'll focus on calculating payback periods for investments. This builds on your understanding of investment appraisal methods. Let's get started!
What is the payback period in investment appraisal?
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Which factors can influence the payback period of an investment? (Select all that apply)
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The {{blank0}} payback period assumes uniform cash inflows, while the {{blank1}} payback period accounts for varying inflows over time.
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An investment costs £10,000 and generates £2,000 annually. What is the payback period?
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Why might a business prefer a shorter payback period?
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Which of the following are advantages of using the payback period method? (Select all that apply)
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The payback period method is less suitable for long-term investments because it {{blank0}} future cash inflows beyond the payback period.
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An investment costs £12,000. The first-year cash inflow is £6,000, and the second-year cash inflow is £4,000. How many years does it take to pay back the investment?
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Match the items on the left with their correct pairs on the right
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