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Investment Payback Analysis
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Investment Payback is the length of time between an initial investment and the recovery of the investment from its annual cash flow. This worksheet helps you with the financial feasibility of expanding your business, or buying a new business.
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Enter Tax Rate Here:

36%

Year: 1 2 3 4 5 6 7 8 9 10
Relevant benefits:
Incremental Value of New Business $50,000 $150,000 $200,000 $300,000 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000
Relevant controllable costs:
Excecutive Salaries & Bonus $50,000 $50,000 $50,000 $75,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
Direct Labor Costs $112,000 $136,000 $160,000 $184,000 $208,000 $208,000 $208,000 $208,000 $208,000 $208,000
Materials Costs $55,000 $61,000 $65,000 $70,000 $77,000 $84,000 $91,000 $98,000 $105,000 $112,000
Sales Salary $50,000 $50,000 $60,000 $75,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
Advertising $100,000 $50,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
New General Manager $55,000 $61,000 $65,000 $70,000 $77,000 $84,000 $91,000 $98,000 $105,000 $112,000
Market research expenses $75,000 $72,000 $69,000 $66,000 $63,000 $60,000 $57,000 $54,000 $51,000 $48,000
Incremental maintenance $0 $5,000 $5,000 $5,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000
Other Costs $6,000 $6,000 $6,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000
Total costs $503,000 $491,000 $505,000 $576,000 $663,000 $677,000 $691,000 $705,000 $719,000 $733,000
EBITDA ($453,000) ($341,000) ($305,000) ($276,000) ($163,000) $323,000 $809,000 $1,295,000 $1,781,000 $2,267,000
Less: Depreciation $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Income before taxes ($503,000) ($391,000) ($355,000) ($326,000) ($213,000) $273,000 $759,000 $1,245,000 $1,731,000 $2,217,000
Less: Taxes ($181,080) ($140,760) ($127,800) ($117,360) ($76,680) $98,280 $273,240 $448,200 $623,160 $798,120
Net income ($321,920) ($250,240) ($227,200) ($208,640) ($136,320) $174,720 $485,760 $796,800 $1,107,840 $1,418,880
Plus: Depreciation $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Minus: Investment $500,000 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Cash Flow ($771,920) ($200,240) ($177,200) ($158,640) ($86,320) $224,720 $535,760 $846,800 $1,157,840 $1,468,880
Cumulative Net Cash Flow ($771,920) ($972,160) ($1,149,360) ($1,308,000) ($1,394,320) ($1,169,600) ($633,840) $212,960 $1,370,800 $2,839,680
Undiscounted payback period: 7.75 Years
Enter Discount Rate Here: 10%
Discounted Cash Flow ($701,745) ($165,488) ($133,133) ($108,353) ($53,598) $126,849 $274,930 $395,038 $491,037 $566,317
Cumulative Discounted Cash Flow ($701,745) ($867,233) ($1,000,366) ($1,108,719) ($1,162,317) ($1,035,469) ($701,745) ($701,745) ($701,745) ($701,745)
Discounted payback period: 9.78 Years

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