Payback period · constant cash flow
Payback period · constant cash flow: use initial investment, net inflow per period. Review the formula, worked example and calculation steps.
Inputs
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Formula & explanation
Payback periods = initial investment / net inflow per period
Variables & units
- Initial investment
- currency · minimum 0, maximum 1000000000000
- Net inflow per period
- currency · minimum 0.01, maximum 1000000000000
Worked example
10,000 initial cost and 2,500 net inflow each year gives 4 years.
Assumptions
Undiscounted constant cash flow with fractional-period interpolation. Excludes cash flows after payback.
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Practice with an example
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