How this calculation works
Simple payback period = upfront cost divided by annual cash flow. It ignores financing, taxes, inflation and discounted cash flow, so use it as a quick screen rather than a full investment model.
Investment and planning
Calculate how long it may take for a project or purchase to repay its upfront cost.
Simple payback period = upfront cost divided by annual cash flow. It ignores financing, taxes, inflation and discounted cash flow, so use it as a quick screen rather than a full investment model.