ROI Formula for Business Equipment Payback period of venture investments. This coefficient will depend on the level of profitability of a specific project or business, i.e. the higher it is, the faster the invested funds will return. It is much more difficult to determine how profitable the use of venture will be. For this purpose, mathematical analysis and specialized statistical assessments are used, on the basis of which the formula was derived: РР=1 / × Ri × x × Pi, where PP – full refund time; P – probability of success or positive outcome; N – total number of beginnings; R – profitability of a specific plan i.
That Will Boost Your Brain Read more Payback periods for capital investments. In this gambling data mexico case, investments are resources aimed at creating fixed assets. This includes a set of measures aimed at updating or improving the equipment of production facilities, as well as performing design and survey and scientific work. All actions are aimed in this case at increasing the main economic indicators, mainly profitability. For calculations, a fractional formula is used: PPI = CI / PRT, where PPI – the payback period for invested funds, which is expressed in months or years; CI – the amount of capital investment, expressed in rubles; PRT is the total net profit received during this time period.
It turns out that the payback period is reduced with a decrease in the invested amount and an increase in its profitability. Moreover, in this case, we mean the full return of capital investments invested in fixed assets. If we talk about the payback period of investments in the case when the implemented modernization and improvement affects some vectors of economic activity, then it must comply with the established standard. It turns out that the enterprise cannot cover costs at the expense of the achieved profitability, since this becomes economically inexpedient.