Calculating Payback Period

Simple payback period calculation for IB Business.
IB Business - 3.2 Investment Appraisal.

[kappfamily]

Thank you, best video out there on this topic

[Techinsane]

Thanks, this helps while struggling through Financial management. Great simplest way to get through this!

[allendiscaya]

MY PROFESSOR JUST GAVE ME THE INITIAL COST (INVESTMENT) AND THE LIFE. HOW THE FUCK CAN I COMPUTE FOR THE PAYBACK PERIOD? SOMEONE ANSWER

[titan]

Hey Dan, thanks for the video it is really useful. However, I am wondering how to calculate the Payback Period if we have no particular numbers how much Cash flow in each Year. For example: "A Project with projected 6-year life would cost 100.000 . Its annual Cash Flow would be 40.000 while its annual income cash flow would be 30.000. What is the Payback Period?"

And thats what it makes it so complicated. I hope you can help. :)

[turtleagingwithchinesemedi]

indeed. others make it sounds so complicated, this is one of the best approach that I have cane across too. thanks! 😊

[pinkaltewari]

i appreciate your effort, its really helpful.

[nusiia]

After watching several videos, this one was just crystal clear. thank you very much :)

[SharinaA]

Hi, I got a question, I have financial management subject and I have stated the question below. What I got confused is that, it says 7 years, but in the revision it says 2 years. I think I dont understand the question. Can someone explain me ?

Example:
If $2m is invested to earn $500, 000 per annum for 7 years, what is the payback period?

[sinclair]

Thanks a lot this really cleared things up for me.

[FKuhn]

I’m uncertain whether this is is correct because isn’t the payback period meant to determine when an investment breaks-even?

[chrisengstrom]

And of course, if they are looking for an actual number for payback period in the form of an approximate, it would be 2.6 years. You could skip the last calculation of multiplying it times 12 to get number of months and just let it remain at 2.6 years. Which is essentially the same as 2 years 7.2 months.

[francistiamsic]

Thank you sir Dan, it was very helpful <3

[sia_ibk]

Really nice video. When you say cash flow, do you mean cash inflow or net cash flow

[claireoflynn]

under minimum pay rate 4 years company just repaying 15 months

[claireoflynn]

under minimum pay rate 4 years company just repaying 15 months

[marianyepe]

thank you very much i now understand the PBP clearly.

[londiwedlamini]

Thank you so much, wonderful explanation

[spalazzo]

so if you needed an answer in years rounded to a decimal, it would be 2.8 years?

[jamesmichealalmen]

Easy to understand. Thank you so much. You have a gift on teaching

[DevanshiRuparel]

why do you divide (15)/25? I understand that you use it to calculate the months... but what exactly does the net cash flow of
yr2 divided by the cash inflow of yr3 mean/signify mathematically?