Revision Notes


Payback Method

  • exact times can be calculated
  • might not get return column
  • allows companies to forecast
  • good for small businesses
  • priorotises quick investment
  • does not take into account net return on following years.


  • calculates percentage return annually 
  • factors in all net returns
  • high ARR is desired
  • shows reliability of investment
  • doesn't prioritise time
  • inflation must be considered


  • takes into account what ARR doesn't
  • works towards targets
  • discount factors allows realisticity
  • rejects investments
  • takes into account full product life…


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