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Will this capex pay back?
Payback, net present value and yearly return on the spend. Change any figure and the answer updates.
Your figures
Payback
4.7 years
NPV
+$194,168
Return
21.3% a year
Each year adds
$96,000
The working
- Each year adds = $180,000 × 45% + $15,000 = $96,000
- Payback = $450,000 ÷ $96,000 = 4.7 years
- NPV = −$450,000 + $96,000 × 6.7101 (8% over 10 years) = +$194,168
- Return = $96,000 ÷ $450,000 = 21.3% a year