The recovery time objective (RTO) is determined based on the acceptable down time in case of a disruption of operations. It indicates the latest point in time at which the business operations must resume after disaster.

RTO must be considered in conjunction with Recovery Point Objective (RPO) to get a total picture of the total time that a business may lose due to a disaster. The two of them together are very important requirements when designing a disaster recovery solution.

RTO = Time of Crash to Time the system is operational (Tup - Tcrash)

RPO = Time since the last backup of complete transactions representing data that must be re-acquired / (entered). (Tcrash - Tbackup)

Lost business Time = (Tup - Tbackup)

For the rest of the Wikipedia entry on the above term, go here.