Capital Expenditure Calculator
Enter equipment, installation and shipping costs plus annual savings.
Total capital cost
β
Enter values above
Annual depreciation
β
Payback period (years)
β
ROI over the useful life
β
Net savings over life
β
Annual return on capital
β
Worked example
With the default inputs shown below, this calculator returns the following results:
| Input | Value |
|---|---|
| Equipment cost ($) | 100000 |
| Installation cost ($) | 10000 |
| Shipping cost ($) | 5000 |
| Useful life (years) | 8 |
| Salvage value ($) | 10000 |
| Annual operating savings ($) | 30000 |
| Result | Value |
|---|---|
| Total capital cost | $115,000 |
| Annual depreciation | $13,125 |
| Payback period (years) | 3.8 |
| ROI over the useful life | 117.39% |
| Net savings over life | $135,000 |
| Annual return on capital | 26.09% |
Values shown are produced by this page in your browser; change any input to update them.
How to use the Capital Expenditure Calculator
- Equipment cost ($) β default 100000
- Installation cost ($) β default 10000
- Shipping cost ($) β default 5000
- Useful life (years) β default 8
- Salvage value ($) β default 10000
- Annual operating savings ($) β default 30000
- Press Calculate to update the results instantly.
Frequently asked questions
Because they are part of getting the asset working and, in most tax regimes, they are capitalised and depreciated alongside the equipment rather than expensed immediately.
Most finance teams want capex to pay back within three to five years. Longer projects need a strategic justification beyond the simple cash payback.
It is the simplest and the most common. Some assets are better matched with accelerated or units-of-production depreciation, which shifts the tax benefit earlier.