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I want to show you how you can calculate the payback period and the discounted payback period using Excel so just as a quick recap the payback period is how long it takes to recoup your initial investment so itamp;#39;s itamp;#39;s got some flaws but one thing thatamp;#39;s really good about the payback period is that it itamp;#39;s easy to understand okay itamp;#39;s really simple and makes for actually a good secondary method for Capital budgeting all right you have to keep in mind that when youamp;#39;re if youamp;#39;re working as a Chief Financial Officer someday everybody in uh you know every Board of member of the board of directors is not necessarily an expert in finance these are smart people in business but they arenamp;#39;t necessarily an expert in that particular field so being able to explain things simply has value also the payback period puts a premium on liquidity getting back our money you know is valuable when you have money tied up somewhere that can be you