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D-payback-period Dictionary

Payback period

How long an investment takes to return its cost

All termsIntroduced in Module 3Open the Toolkit
An open dictionary on a farm office desk
Plain meaning
How long an investment takes to return its cost
How to use it
Divide the investment by the yearly net cash it adds. Lenders and investors look for a payback well inside the life of the asset.
South African benchmark
Concept term; South African lenders assess farm investments on payback.
Country notes
Applies the same way in all five markets.
Go and read
C3 Lesson 3.4
Calculate it
T-C-02 Start-Up Capital Calculator
Library sources
LIB-A141
See also
Depreciation, Orchard establishment
Investment in year zero recovered by yearly returns by the payback yearPayback periodYear 0Year 1Year 2Year 3Year 4Year 5Cost recovered
Payback period, shown as a diagram.

Introduced in C3 Productivity Economics.