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Calculating the payback period of a project is an important decision-making tool that provides insight .

Into how long it will take for your investment to generate enough returns to cover all cash outflows.

This article will help you determine if you have the time necessary for this type of investment.

calculator, calculation, insurance @ Pixabay

How to Calculate Payback Period:

To calculate the payback period, enter all of your cash flows into a spreadsheet. F

Steps: –

Enter in your start-up costs as:

Column A and then any subsequent cash flow amounts that will be in Column B -To find out how long it will take for you to break even .

On your investments after taking those cumulative future values and dividing by the original value invested (Column D) subtract Column C .

Column E -The resulting number is found in Row 11 which represents


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