Payback Period
Finance
Payback Period
Time required for cumulative cash benefits to recover the initial investment.
Examples
- 01A collaborative robot costs EUR 120,000 and saves EUR 48,000 a year in labour and scrap, giving a payback period of 2.5 years.
- 02For small improvement investments, the plant uses a payback period of less than 2 years as a quick approval rule.
- 03One year after installation, actual savings are checked and the expected payback period is updated in the project list.