Break-Even Time

Break-Even Time - Break-even time is how much time is required for a discounted cash flow of a specific investment to equal the original purchase cost of that specific investment. As a general rule, the more time it takes for the specific investment to break-even, the higher the risk is on that specific investment since it will require a longer period of time for the owner of the specific investment to recoup his or her entire investment's purchase price. In the stock market, the longer an investment takes to reach the break-even point, the more risk the investor is said to take on.