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Payback Period Calculator

Payback Period Calculator is part of Toolspire and is ready as soon as this page loads. The cash each month is assumed equal and does not earn interest. A project that pays back in month 12 and one that pays a fortune in month 13 look the same if you stop at payback.

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On this page

What you can do here

Equal months only

If the cash ramps, average it yourself or the single number is a blur.

Net cash, not revenue

Costs that continue each month should already be subtracted.

Undiscounted

The NPV page is where a rate of interest changes the answer.

The sequence

How to use the Payback Period Calculator

  1. 1

    Put only the upfront outlay in the first box

    Do not also spread that outlay across the months or you will double count it.

  2. 2

    Use cash, not accounting profit

    Depreciation is not a monthly cash outflow.

  3. 3

    Read 12 as a year of equal months

    The sample has no remainder. A result of 12.5 is twelve months and half of the next.

Worth knowing

  • Payback Period Calculator on Toolspire: payback in months = cost ÷ monthly net cash.
  • ₹12,000 ÷ ₹1,000 = 12 months.
  • Monthly cash of zero or less is rejected. A project that does not return cash has no payback.
  • There is no discounting. A rupee in month 12 counts the same as a rupee in month 1.

Payback ignores everything after the line

Twelve thousand rupees coming back at one thousand a month is recovered in month 12. Cash that arrives in month 13 does not change the payback at all. That blindness is why payback is a liquidity screen, not a decision by itself. Interest is also ignored: the rupee you get in month 12 is treated as good as the rupee you spend today.

FAQ

Questions about Payback Period Calculator

Where does Payback Period Calculator run?

Payback Period Calculator runs in this tab on Toolspire. What you type or drop in is not sent to us and is not stored on a server.

How many months to recover ₹12,000 at ₹1,000 a month?

12.

What if the monthly cash changes?

This page cannot see a schedule. It divides by one monthly figure.

Does it discount?

No. Discounted payback and NPV need a rate. The NPV page has a rate. This one does not.

Should monthly cash be profit?

It should be cash left after the month’s own costs. Depreciation is not cash.

Keep going

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