From the course: Investment Evaluation

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Payback period in Microsoft Excel

Payback period in Microsoft Excel - Microsoft Excel Tutorial

From the course: Investment Evaluation

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Payback period in Microsoft Excel

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- [Instructor] Let's use Microsoft Excel to calculate the payback period. I'm in exercise file 04_10_Begin. So take a look at the problem that our business owner friend Kevin is facing. He wants to figure out his payback period. And so you'll see that he's got an overhead cost of 7000, some net revenue numbers and he's like when am I gonna get my money back. So you'll see that in Excel I have two distinct rows here, net cash flow and cumulative cash flow. And I'm gonna need to figure those out to figure out my payback period. So let's work on net cash flow first. At term zero, I've got a negative $7000, right. That's the overhead costs, it's always gonna be negative. So let me go ahead and type that in. In the first three years, I have 1500 worth of revenue. So I can actually type in those numbers as well. Look at how easy this is, we've already figured out a bunch. Now in the next five years, I've got only $1000 of cashflow. So I'll type in those numbers and autofil the rest, great…

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