Answer:
True
Explanation:
Payback period capital budgeting method is used to determine when cash inflow or savings from an investment will payback initial outlay.
It gives a quick estimate of when investment will be recoup.
Projects or investment with shorter payback period are favor over others with longer payback period.
The longer it takes to recoup initial investment, the riskier the project.
Payback Period = (Capital Outlay Investment Required /Annual Project
Savings or Cash Inflow).
