Discounted payback period – DPB
Discounted payback period – DPB, месяцы
Discounted payback period is the time that the present (discounted) net cash flow of the project exceeds the initial investment:
CFn(1 + r)-n – net discounted cash flow (net receipts) in n period,
In - initial investments in n period,
r – discount rate.
This indicator is more realistic than the previous one (payback period) and reflects the period after which the total investments return.
Indicator should not exceed the duration of the project
, otherwise the project would be considered unprofitable.
☛ Note that the result of calculations is influenced by the discounting step chosen by the user, and other settings for the calculation parameters of investment indicators.