Costing worked example

Equipment Payback with equipment cost of 87,500 $: a worked example

Suppose equipment cost falls to 87,500 $. This page works the full calculation at that level so you can see exactly which result moves and by how much. Estimate payback period and net savings for equipment purchase decisions.

The inputs for this scenario

  • Equipment cost: 87,500 $ (the input this scenario stresses; the baseline uses 175,000)
  • Annual savings: 64,000 $ / yr (held at the documented default)
  • Annual maintenance: 8,500 $ / yr (held at the documented default)
  • Residual value: 25,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Annual net savings = annual savings − annual maintenance.
  • Payback period works out to 1.58 years at these inputs, and this is the headline figure for the scenario.
  • Annual net savings works out to 55,500 $ / yr at these inputs.
  • Five-year net benefit works out to 215,000 $ at these inputs.
  • Simple ROI works out to 63.43 % at these inputs.

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 50% below the baseline at 1.58 years.
  • It computes payback period in years as equipment cost divided by annual net savings, and also returns five-year net benefit and simple annual ROI. When the numbers land here, the stressed input is the lever to work; the walkthrough above shows exactly how much each output recovers as it climbs back toward the baseline.

Results at a glance

  • Payback period: 1.58 years (headline result)
  • Annual net savings: 55,500 $ / yr
  • Five-year net benefit: 215,000 $
  • Simple ROI: 63.43 %

Run it with your numbers

  • To rerun this with your own numbers, open the live Equipment Payback calculator, set equipment cost to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.