Quick question about business term

[Ctrackstar126]

What is the accountant phrase or word that deals with when you purchase new equipment, assets or investments that is the rate of return.

Its similar to return on investment but it has to deal with how long it takes to recover costs.

Such as I buy a new machine that can yield this much more than my old machine but cost me such and such amount up front but will make up its costs at *term here*

The subject is fine as I have accounting books here but I do not feel like going through the whole book. I will then get the terms and such from that.

 

[Gibson486]

Return on Asset?

 

[spidey07]

Net present value? Depreciation?

 

[thereds]

Payback period?

 

[glenn1]

Breakeven? Hurdle rate?

 

[Ns1]

i would say NPV or payback period

NPV being

"after spending this, we expect to receive this many dollars for this many years, discounted by the current interest rate, to end up with this amount"

payback period being

"this machine is this much, and will pay for itself in this amount of time"

 

[Ctrackstar126]

Thank you sirs. You all are correct and gave me more info than I needed. Also for your guyses information seeing how you know it I make back in a month to a month and a half .

It also pays for depreciation of the replacement without me even selling it. This is obviously a real good thing and very rarely do you get such a quick return.

Although at the same time I suppose it could be a bad thing for not doing it sooner