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Payback Period

Finds how long an investment takes to repay itself.

Interactive inputs coming — use the formula and example below.

Exemple concret

A $30,000 project returning $10,000/year pays back in 3 years.

Comment l'utiliser

  • Use the formula below with your own figures.

La formule

Payback = investment ÷ yearly cash flow.

Exemple concret

A $30,000 project returning $10,000/year pays back in 3 years.

Questions fréquentes

Shorter better?

Usually — it means faster recovery.

Any limit?

It ignores cash flows after payback.

Conseils

  • Know your break-even before scaling spend.
  • Separate margin from markup when pricing.
  • Discount future cash flows to value projects.

Termes clés

Break-even
Where revenue covers costs.
Margin
Profit as a percent of price.
NPV
Discounted value of future cash flows.