Cutoff period is a term in finance.
In capital budgeting, it is the period (usually in years) below which a project's payback period must fall in order to accept the project.
Generally it is the time period in which a project gives its investment back if a project fails to do so the project will be rejected.
For example, a project has the following inflows years Inflows respectively 1 100,000 2 150,000 3 200,000 If the project's payback is 2 years having an outflow of 250,000 the cut off period must be 2 years otherwise the project will be rejected.
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