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Break-Even Time

    0.03 sec.
Break-even time
Related: Premium payback period.

Break-Even Time
In investment decisions, the number of years it takes for an investment to recover its initial cost after accounting for inflation, interest, and other matters affected by the time value of money, in order to be worthwhile to the investor. It differs slightly from the payback period rule, which only accounts for cash flows resulting from an investment and does not take into account the time value of money. Each investor determines his/her own discounted payback period rule and, for that reason, it is a highly subjective rule. In general, however, short-term investors use a short number of years or even months for their discounted payback period rules, while long-term investors measure their rules in years or even decades.


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For instance, Hewlett-Packard uses break-even time to measure project performance.
Break-Even Time & Time-To-Profit: What is the difference between these measures?
 
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