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When both investment have same rate of return then investments are generally considered on the basis of risk involved and how early they pay back
When both investment have same rate of return then investments are generally considered on the basis of risk involved and how early they pay back the amount or on the basis of payback period.Pay back period is the period which determine how early investment made will be return, which basically tells how early we get back money invested. And this is best measure to get to know which investment is best for long term and short term and risk variable involved. Payback period is equal to Investment divide by the annual cash flow. Here projected return are same but one has three years time horizon i.e less payback period whereas otheone has five year time horizon, which has high
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