TL;DR
- Payback answers 'when do I have my money back?', ROI answers 'how much do I earn?'.
- Payback ignores everything after break-even — a short payback can still be a poor investment.
- Use payback as a risk filter, ROI or NPV as the decision criterion.
Shops with tight liquidity optimise payback and unknowingly reject the more profitable machine. Shops with capital optimise ROI and take on more risk than their cash flow tolerates. Both numbers are needed.
Payback_months = Investment / Monthly_cash_benefit
- Only cash-effective benefit belongs in the denominator
| Payback | ROI | |
|---|---|---|
| Unit | Months | Percent |
| Answers | Risk exposure | Profitability |
| Considers life after break-even | No | Yes, within the horizon |
| Considers time value of money | No | No |
| Good as | Filter | Decision criterion |
Two machines, same investment of €80,000
- Machine A
- €5,000/month, 5-year life → payback 16 months, ROI(60) 275%
- Machine B
- €6,700/month, 30-month life → payback 12 months, ROI(30) 151%
- Verdict
- B looks safer, A earns far more. Payback alone picks the wrong one.
Interactive example
Investment, monthly benefit — payback, ROI and NPV
- Payback
- 11.8 months
- ROI over 36 months
- 206 %
- NPV
- € 171.250
Same calculation kernel as the full calculators. For a decision-grade result, open the matching calculator.
Run the numbers in a calculator
Turn your own numbers into a bank-ready PDF report.
Create a reportRelated reading
What is ROI — and what it is not
Return on investment compares net gain to capital employed over a defined horizon.
6 min08/07/2026
What is NPV?
Net present value prices the fact that money next year is worth less than money today.
7 min30/06/2026
What is IRR?
The internal rate of return is the discount rate at which the investment breaks even.
6 min30/06/2026
When does automatic screen printing pay off?
Automation only pays when released hours turn into cash or into sold output.
12 min02/07/2026