Exam CCBA topic 1 question 15 discussion

The payback period is a financial valuation technique used to determine the breakeven point for a project. It calculates the time required for the cumulative benefits of the project to equal the cumulative costs. This helps the business analyst understand how long it will take for the project to recover its initial investment and start generating net positive returns. The BABOK Guide (Chapter 10: Techniques - Financial Analysis) discusses various financial valuation techniques, including the payback period, which is specifically used to assess the breakeven point. The payback period is particularly useful for evaluating the risk and liquidity of a project, as shorter payback periods are generally preferred.

KEY WORD: breakeven point

A. Payback period

A. Payback period

Payback period

Answer is A