Costing worked example

Equipment Payback with equipment cost of 437,500 $: a worked example

This scenario runs the equipment payback calculation on the strong side: equipment cost of 437,500 $, with every other input held at its documented default. Use before buying a machine, automation cell, compressor, oven, or inspection system.

The inputs for this scenario

  • Equipment cost: 437,500 $ (raised for this scenario; the documented default is 175,000)
  • Annual savings: 64,000 $ / yr (unchanged)
  • Annual maintenance: 8,500 $ / yr (unchanged)
  • Residual value: 25,000 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Annual net savings = annual savings − annual maintenance) to the inputs above produces each figure below.
  • At this operating point the engine returns 7.88 years for payback period, the number this scenario is built around.
  • At this operating point the engine returns 55,500 $ / yr for annual net savings.
  • At this operating point the engine returns -135,000 $ for five-year net benefit.
  • At this operating point the engine returns 12.69 % for simple roi.

How this compares with the baseline

  • Against the tool's baseline example, where equipment cost sits at 175,000 $ and the headline result is 3.15 years, this scenario comes in 150% above the baseline at 7.88 years.
  • Use it as the first screen on a capital equipment request, to compare two machine options, or to justify an automation or efficiency project. Treat this as a target state: the delta against the baseline quantifies what the improvement is worth before you commit to chasing it.

Results at a glance

  • Payback period: 7.88 years (headline result)
  • Annual net savings: 55,500 $ / yr
  • Five-year net benefit: -135,000 $
  • Simple ROI: 12.69 %

Run it with your numbers

  • Every input above is editable in the live Equipment Payback calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.