What is payback period and discounted payback period?

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The payback period is the length of time required to recover the cost of an investment.
The payback period of a given investment or project is an important determinant of
whether to undertake the position or project, as longer payback periods are typically not
desirable for investment positions.

The discounted payback period is a capital budgeting procedure used to determine the
profitability of a project. A discounted payback period gives the number of years it takes
to break even from undertaking the initial expenditure, by discounting future cash flows
and recognizing the time value of money. The net present value aspect of the discounted
payback period does not exist in a payback period in which the gross inflow of future
cash flows is not discounted.