It is true that "A shorter payback period does not necessarily mean that one investment is more desirable than another."
The number of years in which you are required to recover the original investment is known as the payback period.
Is investment with a shorter payback period more desirable:
When it comes to the desirability of an investment, shorter or longer payback periods are not the only criteria. We need to see other parameters as well.
For example, a company that is cash-poor would be more interested in investments that are offering a low rate of returns but a shorter payback period instead of an investment that has a longer payback period but demands a high rate of return.
Although in most cases shorter payback periods are more desirable as compared to longer payback periods but it varies from investment to investment.
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