how to calculate discounted payback period using financial calculator

By Bryan Keythman; Updated September 26, 2017.
Usually the voucher codes asda george free delivery above formula is split into two components which are actual cash free riot points giveaway 2016 inflow and present value factor (.e.Using a Financial Calculator to Determine Payback Period You can determine the payback period with a minimum of actual calculation by using one of the many recommended financial calculators available at most office supply stores.Example of the Discounted Payback Period Formula.That said, this third flaw of the discounted payback period can be dismissed if the weighted average cost of capital is used as the rate at which to discount the cash flows.That formula won't be applicable here since it is extremely unlikely that discounted cash inflows will be even.Calculate Discounted Payback Period, step.Step 3, determine how much of the final year is required to pay back the initial investment.The weighted average cost of capital.To counter this limitation, an alternative procedure called discounted payback period may be followed, which accounts for time value of money by discounting the cash inflows of the project.In the example, add 545.45 to -1,000.Assuming the company uses a discount rate of 10, the discounted payback period for this example would be calculated based on the following equation: The equation for this example would be reduced to: which results in a discounted payback period.273.(See References 1, Page 1).This is the discounted payback period of the investment.If the cash flows enter to win free six flags tickets are uneven, then the longer method of discounting each cash flow would be used.As stated in the prior section, the process of calculating the discounted payback period when all cash flows are equal could be simplified by using a present value of annuity table to calculate.In many cases, the cash flows will not be equal.Discount the Annual Cash Flows, step 1, determine a projects initial required investment, annual cash flows and discount rate, which is the rate you could earn on a similar investment.This is the cumulative cash flow after year.Here are the steps you use to calculate discounted payback period:.