Payback Period Calculation for Equipment Replacement

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Payback Period Calculation for Equipment Replacement
Norbert Lepathy, Manager, Seychelles

How to calculate payback period when a company is investing in new equipment to replace old ones.
For example, an airline is investing in replacing their ground power units for aircraft engine start up. The new equipment will not bring any revenues.
Thanks for your help….

Helpful Ideas for Payback Period with Zero Cash Flow
Robert Fullsome, Accountant, United States
Norbert, in case an investment doesn't provide cash flow, you can either
A. Calculate the savings provided by the investment and calculate the payback period while treating the savings as the cash flows, or
B. Include the purchase of these pieces of equipment as part of a larger project.
Hope this helps….



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