ROI calculator
Whether an investment pays off and how fast: return on investment, payback period, net present value and internal rate of return.
Cash flows are counted at the end of each year. Taxes are not included. Estimates only, not financial, tax or legal advice.
How it’s calculated
Return on investment (ROI) is the cash an investment brings back over the period, minus what it cost, divided by what it cost. The annualized return spreads that over the years measured. The payback period is how long it takes for the cash coming in to add up to the amount invested.
Net present value (NPV) counts later cash for less: each year’s (or month’s) cash is divided by one plus the discount rate for every year of waiting, then the investment is subtracted. A positive NPV means the investment beats the return you entered as the discount rate. The internal rate of return (IRR) is the discount rate at which the NPV is exactly zero.
In the online store mode, profit per order is the price minus product cost, platform fees and shipping; monthly profit is that times orders, minus other monthly costs. Platform fees come from our seller fee tables.
Example
A $10,000 machine that saves $3,000 a year for five years returns $15,000: a 50% ROI, paid back in 3.3 years. At an 8% discount rate the NPV is $1,978, and the IRR is 15.2%.
A store selling 150 orders a month at $40, with a $14 product cost, a 15% plus $0.30 platform fee and $6 shipping, keeps $13.70 an order, or $1,555 a month after $500 of other costs. A $10,000 launch pays back in about 6.4 months.