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mohammed abdullah Posted on Apr 27, 2014
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How to calculate the payback of a project of uneven cashflows

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tau1618

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  • Expert 233 Answers
  • Posted on Dec 04, 2017
tau1618
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Joined: May 21, 2010
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Hi Mohammed,

You would have to calculate the net cash flow for each year in a projection. Then simply deduct the net cash flow from Yr 1, Yr 2, Yr 3, etc. until you're left with only a partial year. Then you add the same of years (e.g. 4 years) to the quotient of the following:

remaining capex costs / net cash flow in the following year (e.g. Yr 5 if the first part was completed in 4 years).

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