Payback Period

Payback Period field

An estimate of the length of time that will transpire before net profits recover the initial and periodic costs of an investment to carry out the selected project.

It is calculated using projections depending on the timescale you select and the number of work days in a standard work week in the project calendar since the first time period in which a spending amount was entered for this project or the Project Start Date, whichever occurred earliest. Payback Period is calculated as the length of time that transpires before the cumulative value of income minus costs, usually negative when a project is just beginning, first exceeds zero.

Because it is based on cumulative values, it can be computed using the difference between present values (adjusted using the discount rate) or non-adjusted values for (Total Spending Plan) + Total Benefit Plan; the results will be the same. It is the point in time where the Spending Plan (PV) curve crosses the Benefit (PV) curve.