## 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*DR)/PCF)))/ln(1+DR)
This formula uses 1 Functions, 4 Variables
Functions Used
ln - The natural logarithm, also known as the logarithm to the base e, is the inverse function of the natural exponential function., ln(Number)
Variables Used
Discounted Payback Period - Discounted Payback Period is a capital budgeting procedure used to determine the profitability of a project.
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*DR)/PCF)))/ln(1+DR) --> 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
0.0593352125644093 0.059335 <-- Discounted Payback Period
(Calculation completed in 00.004 seconds)
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## <Capital Budgeting Calculators

Cost of Retained Earnings
​ Go Cost of Retained Earnings = (Dividend/Current Stock Price)+Growth Rate
After-Tax Cost of Debt
​ Go After Tax Cost of Debt = (Risk Free Rate+Credit Spread)*(1-Tax Rate)
Payback Period
​ Go Payback Period = Initial Investment/Cashflow per Period
Cost of Debt
​ Go Cost of Debt = Interest Expense*(1-Tax Rate)

## 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*DR)/PCF)))/ln(1+DR)

## 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 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 (DR) & 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*DR)/PCF)))/ln(1+DR) 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 & 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 (DR) & Periodic Cash Flow (PCF). With our tool, you need to enter the respective value for Initial Investment, Discount Rate & 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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