Payback Period

Use this worksheet to calculate the payback period of an investment. The

payback period is the number of periods (usually years) that it takes to recover
the initial investment from the operating cash flows. Be sure to enter the initial
investment as a negative cash flow. You should use caution when evaluating an
investment by using the payback period calculation since it does not utilize time
value of money calculations and therefore assumes that a present day dollar is
equal to a future dollar. The payback period calculation should be used in
conjunction with time value of money calculations such as Net Present Value
and Internal Rate of Return.
To view the template, click the worksheet tab labeled Template at the bottom
of the screen or press Ctrl-PgDn. With the exception of data entry cells, all cells are
protected. Use the Tab key to move from one unprotected cell to the next.

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 Payback Period
December 21, 2003
Investment Description:

Year Cash flows

0 Initial Investment
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
The payback period in years is: