The straight payback period formula is: cost of project / annual net revenue = payback period Thus, if a project cost $100,000 and was expected to generate $28,000 a year, the payback period would be: ...

To calculate the payback period, enter the following formula in an empty cell: "=A3/A4." The payback period is calculated by dividing the initial investment by the annual cash inflow.

The PEG payback period, therefore, is the length of time it would take to recoup the investment and then double it. Generally, a PEG ratio of 1 indicates a fairly valued company.

In practice, here's what that could look like: Let's say the total system cost for your home is $25,000. You know you qualify for $10,000 in incentives, so now the net cost is $15,000. You also ...

But payback period’s emphasis on the short term has a special appeal for IT managers. “That’s because the history of IT projects that take longer than three years is disastrous,” says Gardner.

To calculate the payback period, enter the following formula in an empty cell: "=A3/A4." The payback period is calculated by dividing the initial investment by the annual cash inflow.