Discounted Payback Period Calculator

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Investment

✖The initial investment is the amount required to start a business or a project.ⓘ Initial Investment [Initial Invt]			+10% -10%
✖Discount Rate is the interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve Bank’s discount window.ⓘ Discount Rate [r]			+10% -10%
✖Periodic Cash Flow is the net amount of cash and cash-equivalents moving into and out of a business.ⓘ Periodic Cash Flow [PCF]			+10% -10%

✖Discounted Payback Period is a capital budgeting procedure used to determine the profitability of a project.ⓘ Discounted Payback Period [DPP]

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Credits

Team Softusvista

Softusvista Office (Pune), India

Team Softusvista has created this Calculator and 500+ more calculators!

Himanshi Sharma

Bhilai Institute of Technology (BIT), Raipur

Himanshi Sharma has verified this Calculator and 500+ more calculators!

Discounted Payback Period Solution

STEP 0: Pre-Calculation Summary

Formula Used

discounted_payback_period = ln(1/(1-((Initial Investment*Discount Rate)/Periodic Cash Flow)))/ln(1+Discount Rate)
DPP = ln(1/(1-((Initial Invt*r)/PCF)))/ln(1+r)
This formula uses 1 Functions, 3 Variables

Functions Used

ln - Natural logarithm function (base e), ln(Number)

Variables Used

Initial Investment- The initial investment is the amount required to start a business or a project.
Discount Rate- Discount Rate is the interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve Bank’s discount window.
Periodic Cash Flow- Periodic Cash Flow is the net amount of cash and cash-equivalents moving into and out of a business.

STEP 1: Convert Input(s) to Base Unit

Initial Investment: 2000 --> No Conversion Required
Discount Rate: 12 --> No Conversion Required
Periodic Cash Flow: 170000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

DPP = ln(1/(1-((Initial Invt*r)/PCF)))/ln(1+r) --> ln(1/(1-((2000*12)/170000)))/ln(1+12)

Evaluating ... ...

DPP = 0.0593352125644093

STEP 3: Convert Result to Output's Unit

0.0593352125644093 --> No Conversion Required

FINAL ANSWER

0.0593352125644093 <-- Discounted Payback Period

(Calculation completed in 00.031 seconds)

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< 5 Other formulas that you can solve using the same Inputs

Net Present Value (NPV) for even cash flow

net_present_value = Expected Cash Flow*((1-(1+Rate of Return)^-Number of Periods)/Rate of Return)-Initial Investment Go

Profitability Index

profitability_index = (Net Present Value (NPV)+Initial Investment)/Initial Investment Go

PV of Perpetuity

pv_of_perpetuity = Dividend/Discount Rate Go

Preferred Stock

preferred_stock = Dividend/Discount Rate Go

Discount when Discount Rate and List Price is Given

discount = Discount Rate*List Price Go

Discounted Payback Period Formula

discounted_payback_period = ln(1/(1-((Initial Investment*Discount Rate)/Periodic Cash Flow)))/ln(1+Discount Rate)
DPP = ln(1/(1-((Initial Invt*r)/PCF)))/ln(1+r)

How to Calculate Discounted Payback Period?

Discounted Payback Period calculator uses discounted_payback_period = ln(1/(1-((Initial Investment*Discount Rate)/Periodic Cash Flow)))/ln(1+Discount Rate) to calculate the Discounted Payback Period, Discounted Payback Period is a capital budgeting procedure used to determine the profitability of a project. Discounted Payback Period and is denoted by DPP symbol.

How to calculate Discounted Payback Period using this online calculator? To use this online calculator for Discounted Payback Period, enter Initial Investment (Initial Invt), Discount Rate (r) and Periodic Cash Flow (PCF) and hit the calculate button. Here is how the Discounted Payback Period calculation can be explained with given input values -> 0.059335 = ln(1/(1-((2000*12)/170000)))/ln(1+12).

FAQ

What is Discounted Payback Period?

Discounted Payback Period is a capital budgeting procedure used to determine the profitability of a project and is represented as DPP = ln(1/(1-((Initial Invt*r)/PCF)))/ln(1+r) or discounted_payback_period = ln(1/(1-((Initial Investment*Discount Rate)/Periodic Cash Flow)))/ln(1+Discount Rate). The initial investment is the amount required to start a business or a project, Discount Rate is the interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve Bank’s discount window and Periodic Cash Flow is the net amount of cash and cash-equivalents moving into and out of a business.

How to calculate Discounted Payback Period?

Discounted Payback Period is a capital budgeting procedure used to determine the profitability of a project is calculated using discounted_payback_period = ln(1/(1-((Initial Investment*Discount Rate)/Periodic Cash Flow)))/ln(1+Discount Rate). To calculate Discounted Payback Period, you need Initial Investment (Initial Invt), Discount Rate (r) and Periodic Cash Flow (PCF). With our tool, you need to enter the respective value for Initial Investment, Discount Rate and Periodic Cash Flow and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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