Payback Period Calculation for Equipment Replacement
🔥NEW 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….
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Robert Fullsome Accountant, United States
Helpful Ideas for Payback Period with Zero Cash Flow
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….