What is the 'Discounted Payback Period'
A capital budgeting procedure used to determine the profitability of a project. In contrast to an NPV analysis, which provides the overall value of an project, a discounted payback period gives the number of years it takes to break even from undertaking the initial expenditure. Future cash flows are considered are discounted to time "zero." This procedure is similar to a payback period; however, the payback period only measure how long it take for the initial cash outflow to be paid back, ignoring the time value of money.
BREAKING DOWN 'Discounted Payback Period'
Projects that have a negative net present value will not have a discounted payback period, because the initial outlay will never be fully repaid. This is in contrast to a payback period where the gross inflow of future cash flows could be greater than the initial outflow, but when the inflows are discounted, the NPV is negative.

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What are some of the limitations and drawbacks of using a payback period for analysis?
Examine the payback period method of analyzing proposed capital investment projects, and learn about its advantages and disadvantages. Read Answer >> 
How do you find the breakeven point using a payback period?
Understand what a company's breakeven point is and what its payback period is. Learn why a company would want to track both ... Read Answer >> 
How do I create grouping schedule codes and subcodes for trial balances?
Find out more about the payback period, what it measures and how to calculate the payback period of a company's project using ... Read Answer >> 
What is the formula for calculating net present value (NPV) in Excel?
Understand how net present value is used to estimate the anticipated profitability of projects or investments and how to ... Read Answer >> 
How do you use net present value to calculate a capital budget?
Learn about the net present value calculation (NPV) and how the NPV rule is used in capital budgeting to compare the expected ... Read Answer >> 
What are the disadvantages of using net present value as an investment criterion?
While net present value (NPV) calculations are useful when you are valuing investment opportunities, the process is by no ... Read Answer >>