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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)

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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