Calculation of Pay back period

      
			              Best Practices
			            
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		            		Remmy, Australia
			            
Calculation of Pay back period

	          		How do we calculate payback period when the returns / cashflows are different each year?
				      
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						            	Tichakunda Gumbo, Zimbabwe
												
				                Comment on payback period  Tecnique

													Your payback period calculation formular is somehow too generalised  in that it assumes that all projects will have equal annual cashflows.What about those with different  annual cashflows.?
				                
										              2

						            	Jaap de Jonge
Editor, Netherlands
												
				                Payback Period if annual cashflows vary?

													In case the annual cashflows are not the same, the formula is still valid.

Suppose the same project is costing $200.000, but now the annual cashflows are: $30.000 (yr 1), $40.000 (yr 2), $50.000 (yr 3), $40.000 (yr 4), $20.000 (yr 5), $20.000 (yr 6), and $50.000 (yr 7).

After 6 years the total of all cash inflows equals the costs (investments) in the project. Therefore the Payback Period of our project is 6 years.
				                
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						            	Peter Hansen, Neverland
												
				                Good resource

													I found that this was a very useful website with relevant explanations and examples. Keep up the good work!
				                
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						            	Herson Deleon, Philippines
												
				                Calculating payback period

													Yes, it is difficult if the annual income of a certain company is not always constant. Obviously you... Sign up
				              
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						            	Vishwa, India
												
				                Payback period calculation for Uneven cashflow over the years

													Say my initial investment is $15,000 and my subsequent annual cash flows are 1) $11000, 2) $7000 and... Sign up
				              
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						            	Ade Osunsanmi, UK
												
				                Pay back Period

													I think the the pay back period is just a cumulative sum of money to PAY BACK the initial investment... Sign up
				              
										              0

						            	Gabriel Hogan, Ireland
												
				                Payback period

													Payback period is a great method but if you are considering investments in innovation it has its dra... Sign up
				              
										              0

						            	Mukela Namushi Mubano
Accountant, Zambia
												
				                Payback Period

													I do not think the formula dictates that the cash flows should be the same. Sometimes they may not b... Sign up
				              
										              0

						            	Azzam Ali
Analyst, Saudi Arabia
												
				                Many Terms

													I observe that there are many methods calculating pp, and I wonder which one is the accurate one. Al... Sign up
				              
										              0

						            	Aser T. Alas, Jr.
Philippines
												
				                Sample Payback Period Computation with Different Annual Cashflow

													Payback period refers to the period of time required for the return on an investment to repay the su... Sign up
				              
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