Calculates how long it takes to recoup an initial investment.
The payback period calculator tells you how long it takes to recover an initial investment from the net cash flows it generates.
Simple payback (equal cash flows) = Initial investment / Annual cash flow For unequal flows: cumulate cash flows year by year until the total equals the investment.
Machine costs $24,000, saves $6,000/year. Payback = 24,000 / 6,000 = 4 years.
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