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the information that can be drawn from each one of them may support the decision of different types of investors (Rentizelas et al., 2009). There are many profitability assessment methods established in the literature; however, only four of them which are commonly used are considered in this thesis. They include: • Payback Period (PBP) • Net Present Value (NPV) • Average Rate of Return (ARR) • Net Benefit Cost Ratio (NBCR) 7.3.1 Payback Period As the name implies, the payback period is the length of time it takes for the initial investment to be repaid out of the net cash inflows from the project. During decision making, it is a common practice to accept investments with a lower payback period than those with a higher one. In payback period calculation, the time value of money is usually disregarded. It is the most easily used economic analysis tool, especially in energy efficiency projects. It is also easy to apply; however, it is regarded as the method of analysis with the greatest limitations, because of its inability to account for the time value of money, risks, financing and so on. Mathematically, the payback period is defined as: where TCI Q NCF Sμ 7-1 ́¥ ́ S 153

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