Payback Period Calculator
Calculate how long it takes to recover your investment with even or uneven cash flows.
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How to Calculate Payback Period for Investments
To calculate the payback period, divide your initial investment by the annual cash inflow for even cash flows. For uneven cash flows, add each year's inflow until the total equals or exceeds the investment. The year in which this happens is your payback period.
- 1Enter Investment & Cash FlowsInput your initial investment and expected annual cash inflows.
- 2Choose Cash Flow ModeSelect even or uneven cash flows based on your scenario.
- 3Calculate & ReviewSee your payback period and a step-by-step breakdown.
Payback Period: Even vs Uneven Cash Flows Explained
The payback period method is a simple way to evaluate investments. Even cash flows make calculation easy, while uneven flows require a year-by-year approach. Use this tool to compare both scenarios and make informed decisions.
- Even Cash FlowsSame inflow every year. Simple division gives the payback period.
- Uneven Cash FlowsVarying inflows require cumulative calculation and a table.
- Business Use CasesCompare projects, plan investments, and assess risk with payback period analysis.
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