The payback period of a project is the length of time it takes for the initial investment in the project to be recovered through the project's cash inflows. It is a financial metric used to assess the profitability of a project and to determine whether it is a viable investment. The payback period is calculated by dividing the initial investment by the average annual cash inflow generated by the project. The result is the number of years it will take to recover the initial investment. The shorter the payback period, the more attractive the project is as an investment, as it indicates a faster return on investment.