The payback period is the ratio of initial investment to the periodic cash flow. It is used to determine the length of time it will take to recoup the initial amount invested on a project or investment. The payback period is used for the quick reference and is generally not considered an end-all for evaluating whether to invest in a particular situation. Enter all the required fields in this payback period calculator to find the resultant value.

Solution:

Average Annual Cash Flows = (1000 + 10000 + 15000) / 3

= 26000 / 3 = 8666.66

Payback period = 50000 / 8666.66 = 85.769