When we divide the cost of purchase by the annual cash inflows the purchase is projected to return, the result is:

Question

Time value of money
Profitability
Internal rate of return
The payback period

Answer 1

When we divide the cost of purchase by the annual cash inflows the purchase is projected to return, the result is the payback period.

The payback period measures how long it will take for an investment to "pay back" its initial cost through the cash inflows it generates.