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Indicators of efficiency of investments

Calculation of key performance indicators in the Budget Plan Express
Payback period – PB
Discounted payback period – DPB
Net discounted (present) value – NPV
Profitability index – PI
Internal rate of return – IRR
Average rate of return – ARR
Modified IRR – MIRR (Modified Internal Rate of Return)
Economic profit measure EVA (Economic Value Added) and other complex indicators

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:

    Discounted payback period is the time that the current (discounted) net cash flow of the project will exceed the initial investment. Budget-Plan Express all calculated indicators of efficiency of investments
    Where:
    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.





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