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Remmy
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How do we calculate payback period when the returns / cashflows are different each year? (...) Read more? Sign up for free
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Tichakunda Gumbo
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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.?
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Jaap de Jonge
Editor, Netherlands
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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
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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
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Calculating payback period
Yes, it is difficult if the annual income of a cer (...)
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Vishwa
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Payback period calculation for Uneven cashflow over the years
Say my initial investment is $15,000 and my subseq (...)
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Ade Osunsanmi
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Pay back Period
I think the the pay back period is just a cumulati (...)
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Gabriel Hogan
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Payback period
Payback period is a great method but if you are co (...)
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Mukela Namushi Mubano
Accountant, Zambia
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Payback Period
I do not think the formula dictates that the cash (...)
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Azzam Ali
Analyst, Saudi Arabia
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Many Terms
I observe that there are many methods calculating (...)
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Aser T. Alas, Jr.
Philippines
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Sample Payback Period Computation with Different Annual Cashflow
Payback period refers to the period of time requir (...)
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Summary
| Calculation of Pay back period |
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