Payback Period Calculator

Investment Details

Initial Investment ($)

Total upfront investment cost

Cash Flow Type

Type of expected returns

Uniform Cash Flows

Annual Cash Flow ($)

Expected annual return

Growth Rate (%)

Annual growth in cash flows

Analysis Options

Discount Rate (%)

For discounted payback period

Investment Type

Type of investment

Payback Formula

Simple Payback:

Period = Initial Investment ÷ Annual Cash Flow

For uniform cash flows

Quick Examples

Equipment Purchase

$100K investment, $25K annual return

Energy Efficiency

$50K investment, growing savings

Technology Upgrade

Variable cash flows over time

Interpretation

Shorter Period: Lower risk, faster recovery

Longer Period: Higher risk, slower recovery

Discounted: Considers time value of money

Benchmark: Compare to company standards

Limitation: Ignores cash flows after payback

Typical Payback Periods

Equipment: 2-5 years

Technology: 1-3 years

Real Estate: 5-10 years

Energy: 3-7 years

Payback Period Calculator