An investment appraisal technique which estimates the length of time that it will take to recoup the initial cash outflow of an investment project.

• A. Net Present Value
• B. Qualitative Investment Appraisal
• C. Payback Period
• D. Sources of Finance

Answer: (C)

The payback period measures how long it takes for an investment to recover its initial cost. This technique directly answers the question by tracking when the cumulative cash outflows are matched by inflows, giving the length of time required to recoup the investment.

It's the best fit here because the prompt is all about recoupment time, not about measuring overall profitability or value today. In practice, this method is simple and useful for liquidity-focused decisions or when speed of recovery matters. However, it ignores cash flows after the initial payback and, in its standard form, doesn’t account for the time value of money.

The other options don’t fit this specific purpose: net present value looks at the value of all cash flows in today’s terms and isn’t about recovery time; qualitative investment appraisal uses non-numeric factors and isn’t a measure of payback; sources of finance refers to funding sources rather than evaluating how long an investment takes to pay back.