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How long until an investment recoups its initial cost? Includes discounted payback (accounts for the time value of money).
Simple payback = initial ÷ annual CF. Discounted payback discounts each year's CF by (1+d)^y and finds the year cumulative discounted CF equals the initial investment.
Depends on industry. Software: <2 years. Real estate: 5–10. Infrastructure: 15+. Compare to your alternative investments.
Simple ignores the time value of money; discounted accounts for it. Discounted is more conservative and preferred by finance.
No — it ignores cash flows after payback. Always pair with NPV or IRR.
This calc assumes constant annual CF. For lumpy flows, use the NPV/IRR calculator.
It means the project loses money within your horizon at your discount rate. Extend horizon, raise CF, or lower the rate to reassess.
Results are estimates for educational purposes only and are not financial advice. Verify with a qualified professional before making decisions.
Last updated October 2026