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...
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Пікірлер: 86
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@aishazahara2546
Жыл бұрын
It's really enjoyable
Your explanation is the best, thank you !
Thank you for your professional support and help. With Regards.
Thank you so much. Extremely helpful🙏🙌
Your explanation is the best.
thank so much for this teaching it helps me understand the payback period very well
you helped me in financial accounting and i nailed the paper
Great lesson, well explained. Thumbs up
Very helpful, thanks. Even with the annoying adverts every couple of minutes.
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Thank you for a great explaination and examples!!
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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
Super👍
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in example 1, what do we do with the salvage value, the cost of capital and the tax rate?
How is payback calculated should a payment not be completed in the allocated years?
@escapismcity1175
Жыл бұрын
I'm writing tomorrow and I still don't know 🤕
Thank you so much for this content.
thankyouu!
amazing sir, rea leboga
I have a question can i start with year 0 with my initial cost for instance example 2 starting with 90000
What happens when your cash flows don't add up to your initial investment?
when doing the initial calculation, Don't we start with year zero for better results or we still get the same answers
what if the question does not giving the cash flow?? 😔😔😔
Thank you so much🙏🏽❤️
What about the 10% cost of capital en 30%tax rate where is it used ,because it's also on the question
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
What if you don't the recovery money with within the 5 years
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
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.
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
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
Жыл бұрын
@@Counttuts hi
Explain npv
What if they didn't give you the investment money
what if the project cant pay the investment within the time period ?
@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.
What happens if the years are mor than the years given . How do you calculate that .
@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.
So cute
Hello sir, Do we have to round off to days or we can leave the answer in decimals for years?
Why dont you take depreciation in first question
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
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.
I got 294 days
Sir !..how did u get 266.19days..I got 1.998032241*10 ^-3 using d calculator
@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
3 жыл бұрын
@@Counttuts €132000÷€81000×365 =266.19 I hope this helps. With Regards
@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
Too confused
Thank you so much