Payback Period & Discounted Payback Calculator
In how many years and months will my business recover its initial capital investment?
Financial Inputs
Annual cost of funds used to calculate true economic capital recovery.
Simple Payback Period
C
Discounted Payback Period
3.7 Yrs
5-Year Cumulative Cash Inflow
5,90,00,000
Key Financial Takeaways
- Capex recovery occurs in 3 years and 0 months (nominal). Factoring cost of funds (12%), true economic breakeven is achieved in 3 years, 9 months.
Frequently Asked Questions
Why does Discounted Payback take longer than Simple Payback?
Simple payback treats future rupees as having identical value to present rupees. Discounted payback recognizes that a rupee received in Year 3 is worth less than a rupee today due to interest and capital opportunity costs, extending the required time to achieve breakeven.
What is an acceptable payback period for manufacturing equipment in India?
For industrial plant and machinery, credit committees generally target a simple payback period between 3 and 4.5 years, aligning with debt amortization tenors and machinery technological depreciation.
Calculators on this platform provide indicative mathematical estimations based on industry-standard financial appraisal models (including Tandon Committee Method II, Nayak Turnover Method, and standard compound amortisation).
They do not constitute a formal facility sanction, credit commitment, or legal advisory from SME PAISA or any partner banking/NBFC institution. Final terms, interest margins, security stipulations, and credit sanctions remain strictly subject to formal credit appraisal, audited balance sheet verification, CMA Data assessment, and risk committee approval by institutional lenders.
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