Payback Period & ROI Calculator
Two numbers decide most equipment and software purchases: how long until the money is back, and what it earns after that. This calculator produces both, then shows how quickly they deteriorate when the benefit comes in under plan.
It starts by fixing what has to be recovered. The price tag is 180,000 in the sample data, but setup and training add 24,000, so payback has 204,000 to repay rather than 180,000. On the other side, the extra gross profit of 38,000 a month is reduced by 12,500 of running cost — licences, maintenance, the person who operates it — leaving a net benefit of 25,500. Payback then falls out cleanly at eight months, and ROI over a two-year horizon at 200%.
Simple payback ignores the cost of waiting, so the sheet also discounts. At an 18% annual cost of capital the discounted payback is 8.5 months rather than 8.0, and the month-by-month table shows both lines crossing zero — the gap between them is what the money would have earned elsewhere while you waited. Net present value puts the whole thing in one figure for comparing against other uses of the same cash.
The second sheet is the part worth printing out. Because the running cost does not shrink when the benefit does, a shortfall hurts more than proportionally: at 85% of plan the payback stretches from 8.0 to 10.3 months, and at 60% of plan to 19.8 months with ROI collapsing from 200% to 21%. The same arithmetic identifies the floor — once gross benefit falls to 12,500 the investment is simply a subscription you are paying for nothing.
None of this decides whether the thing is worth buying; it decides what you are betting on. If the case only works at 100% of plan, you are not buying equipment, you are buying a forecast. Finmap shows what the benefit actually turned out to be once the machine is running, which is the only way to find out whether the eight months were real.
