Type the formula: =D12 + D15 Press Enter. You’ll get the accurate payback period in years. To convert it to months, in cell D17, input the formula: =D16*12 Press Enter to get the output in months format. Step 7 – Inserting Chart to Show Payback Period in Excel Choose the ra...
Select cell D16 and enter the following formula: =D12+D15 The result of our calculations: the payback period with uneven cash flow is 4.75 years. Read More: How to Calculate Payback Period in Excel Method 2 – Combining the IF and AND Functions Now we’ll use the IF and AND functi...
Payback Period Formula in Excel (With Excel Template) Here, we will do the same example of the Payback Period formula in Excel. It is very easy and simple. You need to provide the two inputs i.e,Initial InvestmentandCash Inflows You can easily calculate the Payback Period using Formula in...
How to Calculate the Payback Period in Excel While is it possible to have a single formula to calculate the payback, it is better to split the formula into several partial formulas. This way, it is easier to audit the spreadsheet and fix issues. Follow these steps to calculate the payback ...
The screenshot below shows the formula in Excel. From the finished output of the first example, we can see the answer comes out to 2.5 years (i.e., 2 years and 6 months). By the end of Year 2, the net cash balance is negative $2mm, and $4mm in cash flows will be generated ...
Payback Period Formula Payback Period = (Initial Investment − Opening Cumulative Cash Flow) / (Closing Cumulative Cash Flow − Opening Cumulative Cash Flow) In essence, the payback period is used very similarly to aBreakeven Analysisbut instead of the number of units to cover fixed costs, it...
To calculate the payback period using Excel, you can use the PV function. For our example, the formula would look like this: PV(10%,5,-100,-20) This would give you a payback period of 5 years. You can also use the payback period formula to calculate the required rate of return. Th...
Payback Period Formula To find exactly when payback occurs, the following formula can be used: Applying the formula to the example, we take the initial investment at its absolute value. The opening and closing period cumulative cash flows are $900,000 and $1,200,000, respectively. This is ...
A capital expenditures plan is an important part of your operations plan. Choose a payback period formula, such as calculating internal rate of return or net present value to make the best investment.
As such, it may be advisable to have all the data in one table. Then, break out the calculations line by line. What Is the Formula for Payback Period in Excel? First, input the initial investment into a cell (e.g., A3). Then, enter the annual cash flow into another (e.g., A4...