4 Calculate the Payback Period 6 The payback period is the length of time required for the cash to be coming in from an investment 7 to equal the amount of cash originally spent when the investment was acquired. 10 Assumptions 1 Purchase price of equipment $ 1,200,000 2 Useful life of equipment 12 years 3 Revenue the machine will generate per year 15,000 4 Direct operating costs associated with earning the revenue 250,000 5 Depreciation Expense per year 100,000 25 Using the above five assumptions, calculate how many years it will take to recoup the 26 original investment. Step 1 Find the machine's expected net income Revenue Less: Direct Operating costs Depeciation 25 Using the above five assumptions, calculate how many years it'll take to recoup the 26 original investment. Step 1 Find the machine's expected net income Revenue Less: Direct Operating costs Depeciation Net Income Step 2 Find the net annual cash inflow the machine is expected to generate (convert net income to cash basis) Net Income Add back Depreciation Annual Net Cash Inflow Step 3 Compute the payback period Investment Net Annual Cash Inflow Copy Merge & Center Paste Format Office Update To keep up-to-date with security updates, fixes, and improvements, choose Check for Updates x v fc a 4 Calculate the Payback Period 6 The payback period is the length of time required for the cash to be coming in from an Investment 7 to equal the amount of cash originally spent when the investment was acquired. 10 Assumptions 1 Purchase price of equipment $ 1,200,000 2 Useful life of equipment 12 years 3 Revenue the machine will generate per year $ 15,000 4 Direct operating costs associated with earning the revenue 250,000 5 Depreciation Expense per year 100,000 25 Using the above five assumptions, calculate how many years it will take to recoup the 26 original investment. Step 1 Find the machine's expected net income Revenue Payback Depreciation + Ready HSA 304 : Home Insert Draw Page Layout Formulas Data Review View A . X cut Calibri (Body) 14 A A E 9. Wrap Text Copy Paste Format BI USA E Merge & Center Office Update To keep up-to-date with security updates, fixes, and improvements, choose Check for Updates. (53 x fx 25 Using the above five assumptions, calculate how many years It will take to recoup the 26 original Investment. Step 1 Find the machine's expected net income Revenue Less: Direct Operating Costs Depeciation Net Income $ Step 2 Find the net annual cash inflow the machine is expected to generate (convert net income to cash basis) Net Income Add back Depreciation Annual Net Cash Inflow Step 3 Compute the payback period Investment Net Annual Cash Inflow Depreciation Payback + Ready MacBo 4 Calculate the Payback Period 6 The payback period is the length of time required for the cash to be coming in from an investment 7 to equal the amount of cash originally spent when the investment was acquired. 10 Assumptions 1 Purchase price of equipment $ 1,200,000 2 Useful life of equipment 12 years 3 Revenue the machine will generate per year 15,000 4 Direct operating costs associated with earning the revenue 250,000 5 Depreciation Expense per year 100,000 25 Using the above five assumptions, calculate how many years it will take to recoup the 26 original investment. Step 1 Find the machine's expected net income Revenue Less: Direct Operating costs Depeciation 25 Using the above five assumptions, calculate how many years it'll take to recoup the 26 original investment. Step 1 Find the machine's expected net income Revenue Less: Direct Operating costs Depeciation Net Income Step 2 Find the net annual cash inflow the machine is expected to generate (convert net income to cash basis) Net Income Add back Depreciation Annual Net Cash Inflow Step 3 Compute the payback period Investment Net Annual Cash Inflow Copy Merge & Center Paste Format Office Update To keep up-to-date with security updates, fixes, and improvements, choose Check for Updates x v fc a 4 Calculate the Payback Period 6 The payback period is the length of time required for the cash to be coming in from an Investment 7 to equal the amount of cash originally spent when the investment was acquired. 10 Assumptions 1 Purchase price of equipment $ 1,200,000 2 Useful life of equipment 12 years 3 Revenue the machine will generate per year $ 15,000 4 Direct operating costs associated with earning the revenue 250,000 5 Depreciation Expense per year 100,000 25 Using the above five assumptions, calculate how many years it will take to recoup the 26 original investment. Step 1 Find the machine's expected net income Revenue Payback Depreciation + Ready HSA 304 : Home Insert Draw Page Layout Formulas Data Review View A . X cut Calibri (Body) 14 A A E 9. Wrap Text Copy Paste Format BI USA E Merge & Center Office Update To keep up-to-date with security updates, fixes, and improvements, choose Check for Updates. (53 x fx 25 Using the above five assumptions, calculate how many years It will take to recoup the 26 original Investment. Step 1 Find the machine's expected net income Revenue Less: Direct Operating Costs Depeciation Net Income $ Step 2 Find the net annual cash inflow the machine is expected to generate (convert net income to cash basis) Net Income Add back Depreciation Annual Net Cash Inflow Step 3 Compute the payback period Investment Net Annual Cash Inflow Depreciation Payback + Ready MacBo