Payback Period | Explained With Examples

In this lesson, we explain what the Payback Period is, why it is calculated and the Payback Period Formula. We go through some Payback Period Examples and calculations and also explain the advantages and disadvantages of the Payback Period. We also explain the comparison between the Payback Period, the Internal Rate of Return (IRR), and the Net Present Value (NPV).
Payback period in years, months, and days: • Payback Period | Expla...
Net Present Value (NPV) Calculation Example Using Table: • Net Present Value (NPV...
IRR (Internal Rate of Return) Explained with Example: • IRR (Internal Rate of ...
Profitability Index | Explained with Examples: • Profitability Index | ...
Net Present Value (NPV) Calculation Example Using Excel: • Net Present Value (NPV...
NPV & IRR | BA II PLUS (Texas Instrument): • NPV & IRR | BA II PLUS...
Check out other straight-forward examples on our channel.
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Пікірлер: 86

  • @caleboundo7673
    @caleboundo76733 жыл бұрын

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  • @aishazahara2546

    @aishazahara2546

    Жыл бұрын

    It's really enjoyable

  • @nihadrzk3632
    @nihadrzk36322 ай бұрын

    Your explanation is the best, thank you !

  • @hm4004
    @hm40043 жыл бұрын

    Thank you for your professional support and help. With Regards.

  • @simransingh4031
    @simransingh40313 жыл бұрын

    Thank you so much. Extremely helpful🙏🙌

  • @nestusjonathan6288
    @nestusjonathan62882 жыл бұрын

    Your explanation is the best.

  • @laurentkamara2837
    @laurentkamara28373 жыл бұрын

    thank so much for this teaching it helps me understand the payback period very well

  • @fetcherent3934
    @fetcherent393411 ай бұрын

    you helped me in financial accounting and i nailed the paper

  • @joychiyowele2370
    @joychiyowele23702 жыл бұрын

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  • @jamesleftlion
    @jamesleftlion Жыл бұрын

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  • @farmacybydon8978
    @farmacybydon89783 жыл бұрын

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  • @linneajohansson3796
    @linneajohansson379611 ай бұрын

    Thank you for a great explaination and examples!!

  • @malcolmjohnston6731
    @malcolmjohnston67313 жыл бұрын

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  • @jacksonkingkafwanka2497
    @jacksonkingkafwanka2497 Жыл бұрын

    This is good and great explanation. You have made my work easier,

  • @andreacomesana2828
    @andreacomesana28289 ай бұрын

    excellent explanations! thank you very much

  • @eugeeniita1616
    @eugeeniita1616 Жыл бұрын

    great explanation...thank you so much💯👏

  • @reginasibesomashetankwilim6017
    @reginasibesomashetankwilim6017 Жыл бұрын

    Good one. You made it easy to understand

  • @subintcherian1624
    @subintcherian16242 жыл бұрын

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  • @nkocycindy2455
    @nkocycindy24553 жыл бұрын

    thank you so much for the learning

  • @zeynab2542
    @zeynab25422 жыл бұрын

    Thank You very much, it helps a lot

  • @princekanengoni4012
    @princekanengoni40122 жыл бұрын

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  • @blessedhute245
    @blessedhute245 Жыл бұрын

    Well explained ,I understood.

  • @khalidmohameddahir6283
    @khalidmohameddahir62832 жыл бұрын

    this video helps me a lot thankz you so much

  • @symplytomi5178
    @symplytomi51783 жыл бұрын

    Thank you 👏👏

  • @kizzaflavia7900
    @kizzaflavia7900 Жыл бұрын

    Thanks so much 🙏 the video was helpful

  • @EzekielBb
    @EzekielBb3 жыл бұрын

    Thank you 🙏🏻

  • @haniabdulazizaden833
    @haniabdulazizaden833 Жыл бұрын

    Thank you so much God bless you 🙏

  • @nancymakonnen1622
    @nancymakonnen16224 ай бұрын

    Execellent explantion, thank you

  • @EMMYCHRIS1
    @EMMYCHRIS1 Жыл бұрын

    Well done. Good job

  • @sibongiledhlamini5216
    @sibongiledhlamini5216 Жыл бұрын

    well explained thank you

  • @margaretmhlanga1316
    @margaretmhlanga13163 жыл бұрын

    Thank you l have been helped by this video

  • @SandraBusolo-zf4zb
    @SandraBusolo-zf4zb Жыл бұрын

    I have enjoyed the lesson thank you

  • @ziziphobusie9571
    @ziziphobusie95712 жыл бұрын

    Thank you!!!

  • @daneciaruiters207
    @daneciaruiters207Ай бұрын

    Thank you so much for this

  • @fredrickkiiruwanjiru-lifec2446
    @fredrickkiiruwanjiru-lifec244612 күн бұрын

    nice one , keep up the tutorials

  • @fanashaa3130
    @fanashaa31302 жыл бұрын

    Thank u so much.

  • @amukelaniaffection3040
    @amukelaniaffection3040 Жыл бұрын

    Thank you so much

  • @siyasangagoqweni8072
    @siyasangagoqweni8072 Жыл бұрын

    thank you so much

  • @dylantagarira8920
    @dylantagarira89203 жыл бұрын

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  • @slindilelindy3484
    @slindilelindy34842 жыл бұрын

    Thanks you 😌

  • @akellosharonveronica5598
    @akellosharonveronica55985 ай бұрын

    Thank so much

  • @subinagurung222
    @subinagurung2228 ай бұрын

    Thankyou so much sir

  • @msizinxumalo6585
    @msizinxumalo6585 Жыл бұрын

    Thank you

  • @motshabimogotsi6654
    @motshabimogotsi66543 жыл бұрын

    Gosh I have amounts that need to be calculated which the table consist of the cash flows and net profit per year, do i add the net profit to the net cash flows or what? im so confused

  • @thembekatg1172
    @thembekatg11722 жыл бұрын

    Super👍

  • @user-is9ly6pm7q
    @user-is9ly6pm7q2 ай бұрын

    Nice 👍❤

  • @karabomatlokotsi4878
    @karabomatlokotsi4878 Жыл бұрын

    The video came in really handy.....awesome job !!!!

  • @nancynasimiyu5466
    @nancynasimiyu54668 ай бұрын

    Thanks

  • @manjipulse5144
    @manjipulse5144 Жыл бұрын

    awesome

  • @fetcherent3934
    @fetcherent393411 ай бұрын

    in example 1, what do we do with the salvage value, the cost of capital and the tax rate?

  • @JacquiMification
    @JacquiMification2 жыл бұрын

    How is payback calculated should a payment not be completed in the allocated years?

  • @escapismcity1175

    @escapismcity1175

    Жыл бұрын

    I'm writing tomorrow and I still don't know 🤕

  • @deborahmwanganjye846
    @deborahmwanganjye8463 жыл бұрын

    Thank you so much for this content.

  • @keesharawf2654
    @keesharawf2654 Жыл бұрын

    thankyouu!

  • @travellers111
    @travellers1113 жыл бұрын

    amazing sir, rea leboga

  • @lydiaamulungu9123
    @lydiaamulungu9123 Жыл бұрын

    I have a question can i start with year 0 with my initial cost for instance example 2 starting with 90000

  • @ghettovlogger8288
    @ghettovlogger82883 жыл бұрын

    What happens when your cash flows don't add up to your initial investment?

  • @fetcherent3934
    @fetcherent393411 ай бұрын

    when doing the initial calculation, Don't we start with year zero for better results or we still get the same answers

  • @farahey_
    @farahey_3 жыл бұрын

    what if the question does not giving the cash flow?? 😔😔😔

  • @queeniyah4514
    @queeniyah45143 жыл бұрын

    Thank you so much🙏🏽❤️

  • @monicawanyonyi2713
    @monicawanyonyi2713 Жыл бұрын

    What about the 10% cost of capital en 30%tax rate where is it used ,because it's also on the question

  • @emmanuelsithole6654
    @emmanuelsithole6654 Жыл бұрын

    Does anyone else notice that the lecture's calculated answers are not the same when u put it using your own calculator?. even the 1st example. the real answer is 3.001 and the second example the real answer is 2.002191781

  • @blxckapple4939
    @blxckapple493910 ай бұрын

    What if you don't the recovery money with within the 5 years

  • @stevenjuguna4888
    @stevenjuguna48884 жыл бұрын

    Question. What was the point of the 10% cost of capital and a 30% Tax rate? It wasn't used anywhere in the calculations.

  • @Counttuts

    @Counttuts

    4 жыл бұрын

    We did not need them for calculating the Payback Period. If you were asked to calculate the NPV for instance, you would then need the cost of capital.

  • @johndavids4008
    @johndavids40083 жыл бұрын

    what happens when the investment period ends in year 4 and in the same year the full recovery takes place . I tried that with the formulae,however i got a negative answer. what am i doing wrong?

  • @Counttuts

    @Counttuts

    3 жыл бұрын

    Good day, due to the volume of requests for help regarding student specific questions, we are not able to address them on this platform. However, you can request a session at reasonable rates with us at info@counttuts.com to address your challenges with the subject.

  • @mohamedabdullahi8047

    @mohamedabdullahi8047

    Жыл бұрын

    @@Counttuts hi

  • @DerekAghanama-np9ur
    @DerekAghanama-np9ur3 ай бұрын

    Explain npv

  • @Amantle.Molifi
    @Amantle.MolifiАй бұрын

    What if they didn't give you the investment money

  • @georgemichael5899
    @georgemichael58994 жыл бұрын

    what if the project cant pay the investment within the time period ?

  • @Counttuts

    @Counttuts

    4 жыл бұрын

    Then according to the payback period, the project should be rejected because if the entity invests in the project, it will not be able to recover its investment.

  • @raziashakk198
    @raziashakk1983 жыл бұрын

    What happens if the years are mor than the years given . How do you calculate that .

  • @Counttuts

    @Counttuts

    3 жыл бұрын

    That is not possible, check your calculations properly. The only other instance is not being able to recover the initial investment by the end of the investment period. In that case, there is no payback peeiod as the money will not be recovered. If you require further assistance, you can book a session here: info@counttuts.com.

  • @evanspaulmuwonge1511
    @evanspaulmuwonge1511 Жыл бұрын

    So cute

  • @by_nm219
    @by_nm2193 жыл бұрын

    Hello sir, Do we have to round off to days or we can leave the answer in decimals for years?

  • @Rose-xo8mx
    @Rose-xo8mx Жыл бұрын

    Why dont you take depreciation in first question

  • @peterchellowilpard1972
    @peterchellowilpard19723 жыл бұрын

    Harry Ltd is considering an investment in a new machine, either Machine A or Machine B. Both machines would have an expected life of five years and would be depreciated on a straight-line basis. The following information is available: (N$000) Machine A Machine B Initial cost A 400 B 560 Residual value A 50 B 60 Accounting profits; A B Year 1 60 50 Year 2 70 60 Year 3 70 80 Year 4 40 70 Year 5 30 40 Harry Ltd.’s cost of capital is 12% per annum for which the discount factors are: Year 1 0.893 Year 2 0.797 Year 3 0.712 Year 4 0.636 Year 5 0.567 how do i calculate the pay back there? and the NPV Because all i am getting is negative answers

  • @Counttuts

    @Counttuts

    3 жыл бұрын

    Good day, due to the volume of requests for help regarding student specific questions, we are not able to address them on this platform. However, you can request a session at reasonable rates with us at info@counttuts.com to address your challenges with the subject.

  • @thabelomarvellous7039
    @thabelomarvellous703910 ай бұрын

    I got 294 days

  • @haneefahmusa
    @haneefahmusa4 жыл бұрын

    Sir !..how did u get 266.19days..I got 1.998032241*10 ^-3 using d calculator

  • @Counttuts

    @Counttuts

    4 жыл бұрын

    Good day, I don't understand your calculation above, but if you follow the formula you should get the same answer I got.

  • @hm4004

    @hm4004

    3 жыл бұрын

    @@Counttuts €132000÷€81000×365 =266.19 I hope this helps. With Regards

  • @touchygoldy2919

    @touchygoldy2919

    3 жыл бұрын

    Greetings sir For pay back period I'm not getting the same answer as yours even after doing you case study. Thank u

  • @diz533
    @diz5332 жыл бұрын

    Too confused

  • @fetcherent3934
    @fetcherent393411 ай бұрын

    Thank you so much