MCPCalc

Payback Period Calculator

Calculate the time to recoup an initial investment from periodic cash flows.

Scratchpad (not saved)

$

Upfront cost of the investment

$

Expected annual net cash flow

%

Expected annual growth in cash flows

%

Set > 0 for discounted payback period

What This Calculator Does

Calculate the time to recoup an initial investment from periodic cash flows.

It combines Initial Investment, Annual Cash Flow, Annual Cash Flow Growth, Discount Rate (for discounted payback) to estimate Payback Period, 5-Year Total Cash Flow, 5-Year ROI.

Formula & Method

Core equations: Simple payback period finds when cumulative cash flows equal the initial investment: \text{Payback} = Y + \frac{\text{Unrecovered Cost}}{CF_{Y+1}} where Y is the last full year before recovery. The discounted payback uses: CF_{d,i} = \frac{CF_i}{(1 + r)^i} Inputs are applied in base units, then derived metrics are computed from the same equations and rounded for display.

Notation used in the formulas: R = Payback Period; x_{1} = Initial Investment; x_{2} = Annual Cash Flow; x_{3} = Annual Cash Flow Growth; x_{4} = Discount Rate (for discounted payback).

Method summary: inputs are normalized to consistent units, core equations are evaluated, then secondary values are derived and rounded for display.

Use this calculator for quick scenario analysis. Start with baseline values, change one driver at a time, and compare how sensitive the results are to each input shown above.

Inputs Used

  • Initial Investment: Upfront cost of the investment
  • Annual Cash Flow: Expected annual net cash flow
  • Annual Cash Flow Growth: Expected annual growth in cash flows
  • Discount Rate (for discounted payback): Set > 0 for discounted payback period

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