Upgrade ROI / Payback
Simple payback and NPV over the entered horizon (default 10 years) at a user-supplied discount rate.
Example
You enter
- Incremental cost 5000
- Annual savings 800
- Discount rate (%) 4
- Years 10
You get
- Simple payback 6.25 yr
- NPV over the entered years 1488.7
Checked against published worked examples from: Energy Management Task Force (Saskatchewan).
Details, formula, and sources
Formula or tableSimple payback = capital / annual_savings. NPV = Σ (savings_t / (1 + r)^t) − capital. Discount rate r is user-supplied.
Source and editionClassical capital-budgeting formulas.
Free accessFormulas free in published finance / capital-budgeting texts.
What governsEstimate. AHJ and licensed professional govern.
API field namesincremental_cost, annual_savings, discount_rate_percent, years, simple_payback_yr, npv_dollars
- Default horizon 10 years unless user suppliesengineering practice for capital upgrades