Pay back period

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Amila

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Could you please enlighten me how to calculate pay back period using excel formula

Many thanks
 
Put here your example workbook with expected result.
 
Pls find the attached example for payback period
 

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  • Example.xlsx
    13.5 KB · Views: 12
How is the result in cell B23 calculated? We need to know this if we are to provide a formula.
 
By definition:
The payback period is the amount of time it takes for expected cash inflow to cover the initial cash outflow. Calculate the payback period by dividing a company's initial investment cost by its annual expected cash inflow.
From the Net Cash Flow line, it appears to be between years 5 and years 6 (when the Net Cash Flow changes from a neg figure to a positive figure.
I'm not sure why you have a manual estimation of 9 years in B23.

This site should give you a better idea of how to calculate the payback period:
http://techtites.com/calculating-payback-period-in-excel/
 
Thanks, candybg, but it's up to the OP to explain what the calculation is that they require: we should not be having to learn how the calculations are done before being able to help.
 
Thank you for telling me the rules here.
Although I felt that the OP did say what he wanted - a formula to calculate the Payback Period.
 
candybg said:
Thank you for telling me the rules here.
Although I felt that the OP did say what he wanted - a formula to calculate the Payback Period.
Click to expand...

I shall be interested to see the solution that you offer. :)
 
The cumulative cash flow becomes only in the 9 th year and 7 month. I have shown the working in the example. Highly appreciated your valuable advise on this.

Regards,

Amila
 

Attachments

  • Example.xlsx
    13.6 KB · Views: 9
Did you work through the formula on the site I referenced?
Do you need additional help with it?
 
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