Find simple payback years, NPV, and profitability index for a level annual cash inflow.
| Payback (years) | – |
| NPV | – |
| PI | – |
Use this when a project costs a lump sum up front and then throws off roughly the same cash each year. Simple payback ignores the time value of money; NPV and PI do not. Discounted payback is not computed here.
Payback years = investment ÷ annual cash. NPV = PV of the annuity − investment, where PV = annual × (1 − (1 + r)^(−n)) / r (or annual × n if the rate is essentially zero). PI = PV of inflows ÷ investment. Type 8 for an 8% discount rate. All money figures share one currency.
Investment: Up-front outlay (positive number).
Annual cash: Level inflow each year after the investment.
Discount rate (%): Yearly hurdle rate as a percent.
Years: How many years the annual cash lasts (used for NPV and PI, not for simple payback).
Payback (years): Undiscounted years to recover the investment.
NPV: Net present value of the level inflows minus the investment.
PI: Profitability index (PV of inflows over investment).
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