Business case model
ROI calculator: payback, NPV and IRR for industrial projects
A budget request is stronger when the payback is visible. Enter the total installed investment and the annual net benefit; the model returns simple payback, lifetime ROI, NPV at your cost of capital and IRR — then carries the business case into your RFQ.
Last reviewed 2026-08-21. Pre-tax planning model — not investment advice or a financing offer.
Investment
Annual benefit
Assumptions
Quick answer
Estimate whether an equipment investment generates enough annual net benefit to justify the total installed cost.
Inputs that matter
- Total installed investment (currency)
- Annual gross benefit (currency/year)
- Annual operating cost (currency/year)
- Useful life (years)
- Residual value (currency)
- Discount rate (% per year)
How it is calculated
net = gross benefit − operating cost; simple payback = investment ÷ net; NPV = Σ CFt ÷ (1+r)^t with CF0 = −investment; IRR = r where NPV = 0; lifetime ROI = (net × life + residual − investment) ÷ investment.
What the result means
- Annual net benefit
- Simple payback — Undiscounted
- Discounted payback
- Annual ROI — Accounting ratio, not a discounted return
- Lifetime ROI
- NPV
- IRR — Returned only when the cash-flow series changes sign
What is not included
- Simple payback ignores the time value of money and must not be read as a return.
- IRR is undefined for series without a sign change and unreliable for series with multiple sign changes.
- Does not model financing cost, tax, inflation or currency risk.
- Single-currency model. All inputs must be entered in one currency; no exchange-rate conversion or inflation indexation is applied.
- Pre-tax model. Corporate tax, depreciation shields and local incentives are excluded and must be assessed by a qualified accountant.
What must be confirmed
This is a preliminary planning estimate. 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.
Next step
Carry the result into a structured RFQ: Project budget, Annual benefit, Operating cost, Required payback, Project life. You review and approve every transferred value — nothing is submitted automatically.
Engine version 1.2.0 · reviewed 2026-08-21 · full methodology
Common questions
What investment figure should I enter?
Enter total installed project cost — equipment plus freight, duties, installation, civil works, commissioning, training and initial spares — not the ex-works equipment price. The CapEx calculator builds that figure line by line and hands it over.
What discount rate should I use for NPV?
Use your organisation's cost of capital or hurdle rate. Industrial buyers commonly screen projects at 8–15% depending on country risk, currency and financing structure. The rate is a user-entered assumption, not a recommendation.
Is this a financing offer or investment advice?
No. This is a pre-tax planning model: it excludes tax, depreciation shields, grants and financing cost. Global B2B Group is a supplier-neutral project sourcing platform, not a lender, financial adviser or broker-dealer.
Can I attach the business case to an RFQ?
Yes. The RFQ button carries the investment band, payback and sector into your project brief so shortlisted manufacturers respond to a budget-approved scope rather than an open-ended enquiry.
Related: CapEx calculator · OPEX calculator · TCO calculator · Throughput calculator