Payback period are a commonly used criterion for evaluating proposed investments. The payback period is the exact amount of time required for the firm to recover its initial investment in a project as calculated from cash inflows. In the cash of annual cash inflow; for a mixed stream the yearly cash inflows must be accumulated until the initial investment is recovered. Although popular, the payback period is generally viewed as an unsophisticated capital budgeting technique, since it does not explicitly consider the time value of money by discounting cash flows to find present value.