| Period | Cash Flow | Discounted Cash Flow | Cumulative Cash Flow | Cumulative Discounted Cash Flow |
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The Payback Period is the time it takes to recover the cost of an investment. Simply put, it is the length of time an investment reaches a break-even point.
The simple payback period is calculated by dividing the initial investment by the annual cash flow. If cash flows are uneven, it's calculated by determining the point at which cumulative cash flows equal the initial investment.
The discounted payback period is similar to the simple payback period except that it takes into account the time value of money. Future cash flows are discounted back to their present values for a more accurate analysis.
This calculator is for educational purposes only. Always consult with a qualified financial advisor before making investment decisions.