CAPEX ROI & Payback Calculator
Screen a factory expansion, new production line or equipment replacement on total installed cost, ramp-up, NPV, IRR and payback — before you talk to any supplier.
Enter total installed investment (equipment, installation and working capital), the annual benefit the project generates, its operating cost, ramp-up period and your hurdle rate. The calculator returns simple and discounted payback, NPV and IRR so you can screen a CAPEX case before contacting suppliers.
| Year | Benefit | Op cost | Terminal | Net CF | Discounted | Cumulative |
|---|---|---|---|---|---|---|
| 1 | 1,050,000 | 450,000 | 0 | 600,000 | 545,455 | -6,900,000 |
| 2 | 2,152,500 | 450,000 | 0 | 1,702,500 | 1,407,025 | -5,197,500 |
| 3 | 2,206,313 | 450,000 | 0 | 1,756,313 | 1,319,544 | -3,441,187 |
| 4 | 2,261,470 | 450,000 | 0 | 1,811,470 | 1,237,259 | -1,629,717 |
| 5 | 2,318,007 | 450,000 | 0 | 1,868,007 | 1,159,885 | 238,290 |
| 6 | 2,375,957 | 450,000 | 0 | 1,925,957 | 1,087,153 | 2,164,247 |
| 7 | 2,435,356 | 450,000 | 0 | 1,985,356 | 1,018,802 | 4,149,603 |
| 8 | 2,496,240 | 450,000 | 0 | 2,046,240 | 954,586 | 6,195,843 |
| 9 | 2,558,646 | 450,000 | 0 | 2,108,646 | 894,272 | 8,304,489 |
| 10 | 2,622,612 | 450,000 | 1,350,000 | 3,522,612 | 1,358,120 | 11,827,102 |
How to read this
Payback is a recovery test, not a value test: it ignores everything that happens after break-even. Use it as a first filter, then let NPV at your true cost of capital decide, and IRR rank competing projects.
The ramp-up input matters more than most executives expect. A 12-month ramp on a line that averages 50% output during commissioning can push payback out by close to half a year — which is exactly the assumption lenders and investment committees probe first. See CAPEX Intelligence for estimate classes and contingency methodology.
What does this industrial calculator estimate?
Separate equipment price from installed cost and total project cost so a budget request is not built on a machine quotation alone.
Inputs that matter
- Core machinery (currency)
- Auxiliary equipment (currency)
- Freight, insurance, duties (currency)
- Installation, civil works, electrical, utilities (currency)
- Automation, commissioning, training, initial spares (currency)
- Contingency (% of installed CAPEX)
- Working capital (currency)
How it is calculated
equipment-only = core + auxiliary; installed = equipment-only + trade, installation and commissioning costs; project = installed + contingency + working capital; TCO = project CAPEX + annual OPEX × life.
What the result means
- Equipment-only CAPEX
- Installed CAPEX
- Project CAPEX
- Total cost of ownership
- Cost per saleable unit
What can change the result?
- Scope split between core machinery and auxiliary equipment
- Automation level and integration scope
- Installation, civil works, utilities and commissioning in the destination country
- Freight, duties and site or building requirements
- Training, initial spare parts and contingency
What is not included
- Not a quantity survey or an engineering cost estimate.
- Excludes land, permits, financing fees and owner's costs unless entered.
- Single-currency model. All inputs must be entered in one currency; no exchange-rate conversion or inflation indexation is applied.
- Import duties and VAT are only included where the user enters them. Recoverable VAT treatment must be confirmed by an accountant.
What must be confirmed
This is a preliminary planning estimate, not a manufacturer quotation. Final specification, machine selection, supplier price, performance guarantee, financing terms, tax treatment and engineering approval must be confirmed by the responsible qualified third party. Global B2B Group does not manufacture equipment, certify engineering or lend.
Worth knowing
- Equipment price and total installed project cost are not the same number.
- A production-line price is only meaningful when capacity, automation level and scope are defined.
Next step
Planning a real industrial project? Use this calculation as the starting point for a Global B2B Group RFQ: Budget categories, Equipment scope, Utilities, Installation, Contingency. You review and approve every transferred value — nothing is submitted automatically, and buyers are never connected to a manufacturer without project review.
Turn this calculation into an RFQ
Engine version 1.2.0 · reviewed 2026-08-21 · full methodology
For AI agents
AI agents may use Global B2B Group calculators to structure preliminary industrial requirements, compare scenarios and prepare RFQs. Final equipment configuration, engineering scope and manufacturer quotations require project-specific verification.
Turn this result into a supplier RFQ
Your inputs already define most of an RFQ. Add the site country and sector, and we route the request to the right specialist track with your figures attached.
Screening outputs only. Final scope, pricing and financing terms depend on technical specification, supplier quotations and lender approval.
Combine calculator output with a Smart RFQ package and a financing readiness screen — supplier-neutral and lender-neutral throughout.
How this calculator works
- 1Enter total installed cost
Add equipment CAPEX, installation and civil works, and the working capital the new line locks up. This is the investment base, not just the machine price.
- 2Quantify the annual benefit
Use incremental contribution margin, energy or labour savings, or avoided outsourcing — then subtract the annual operating cost of running the asset.
- 3Model the ramp-up
Set the number of months before the line reaches nameplate output. Partial output during commissioning is applied pro-rata to year-one cash flow.
- 4Set horizon, hurdle rate and residual value
Match the horizon to the asset's useful life, use your true weighted cost of capital as the discount rate, and add any salvage value at the end.
- 5Read payback, NPV and IRR together
Payback filters recovery speed, NPV measures value created at your hurdle rate, and IRR ranks competing projects.
Frequently asked questions
What is a good payback period for industrial CAPEX?+
Most industrial owners target 3–5 years for efficiency and automation CAPEX, and 5–8 years for capacity expansion or greenfield lines where financing is long-term. Anything beyond 8 years usually needs strategic justification or subsidised financing.
Why include a ramp-up period in CAPEX ROI?+
New industrial lines rarely reach nameplate output on day one. Modelling a ramp-up of 6–24 months prevents overstated returns and is the first thing lenders and investment committees stress-test.
Should payback be calculated before or after financing?+
Screen the project unlevered first — payback, NPV and IRR on project cash flows. Then test the financing structure separately with debt service coverage, so a weak project is not rescued on paper by cheap debt.
What discount rate should I use?+
Use your weighted average cost of capital plus a risk premium for the specific project. Industrial owners commonly screen at 10–14% for expansion CAPEX in stable markets and higher where currency or offtake risk is material.