How It Works
Payback is the first year cumulative cash receipts recover the initial investment, interpolating linearly within that year. NPV discounts year-end cash flows.
A later negative cash flow can reverse recovery; the result is the first payback, not a guarantee of continued profitability.
Reference Sources
FAQs
How does this calculator work?
Payback is the first year cumulative cash receipts recover the initial investment, interpolating linearly within that year. NPV discounts year-end cash flows.
What assumptions should I check?
A later negative cash flow can reverse recovery; the result is the first payback, not a guarantee of continued profitability.