Discounted Payback Period is:
ASame as Payback Period
BAlways shorter than Payback
CTime to recover initial outlay from discounted cash inflows
DUsed only for IRR calculation
Answer & Solution
Correct answer: C. Time to recover initial outlay from discounted cash inflows
1. Discounted Payback uses PV of future cash inflows.
2. Better than plain Payback because it considers time value of money.
3. Usually longer than the un-discounted Payback Period.
_Source: ICAI BoS CA Inter Paper 6A, Ch 7 "Investment Decisions", §6 — Discounted Payback_