Estimate annual net benefit, horizon benefit, simple ROI, and payback from entered enterprise software cost and benefit assumptions.
Formula
const initialCost = Math.max(0, Number(inputs.initialInvestment || 0)); const annualSavings = Math.max(0, Number(inputs.annualCostSavings || 0)); const annualGrossProfit = Math.max(0, Number(inputs.annualGrossProfitIncrease || 0)); const recurringCosts = Math.max(0, Number(inputs.annualRecurringCosts || 0)); const delayMonths = Math.max(0, Number(inputs.benefitRealizationDelayMonths || 0)); const years = Math.max(1, Number(inputs.analysisYears || 1)); const annualNetBenefitScenario = Math.round((annualSavings + annualGrossProfit - recurringCosts) * 100) / 100; const benefitMonths = Math.max(0, years * 12 - delayMonths); const grossBenefitOverHorizon = Math.round((Math.max(0, annualNetBenefitScenario) * benefitMonths / 12) * 100) / 100; const netBenefitOverHorizon = Math.round((grossBenefitOverHorizon - initialCost) * 100) / 100; const simpleRoiPct = initialCost > 0 ? Math.round((netBenefitOverHorizon / initialCost * 100) * 100) / 100 : 0; const simplePaybackFromProjectStartMonths = annualNetBenefitScenario > 0 ? Math.round((delayMonths + initialCost / (annualNetBenefitScenario / 12)) * 100) / 100 : 0; return { annualNetBenefitScenario, grossBenefitOverHorizon, netBenefitOverHorizon, simpleRoiPct, simplePaybackFromProjectStartMonths };Initial Software and Implementation Cost ($)
500,000
Entered Annual Cost Savings ($)
150,000
Entered Annual Gross Profit Increase ($)
100,000
Annual Recurring Software and Support Cost ($)
50,000
Benefit Realization Delay (Months)
6
Analysis Horizon (Years)
5
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With the default inputs, $150,000 in annual cost savings plus $100,000 in annual gross-profit increase minus $50,000 in recurring costs produces a $200,000 annual net-benefit scenario. Across a 5-year horizon with a 6-month delay, modeled gross benefit is $900,000. After the $500,000 initial cost, net benefit is $400,000, simple ROI is 80%, and simple payback from project start is 36 months.
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The estimate combines Initial Software and Implementation Cost ($), Entered Annual Cost Savings ($), Entered Annual Gross Profit Increase ($) and returns Annual Net Benefit Scenario, Gross Benefit Over Horizon, Net Benefit Over Horizon.
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This calculator is provided for educational and informational purposes only. It does not constitute professional legal, financial, medical, or engineering advice. Results are estimates based on the inputs provided and should not be relied upon for making significant decisions. Consult a qualified professional to verify your specific situation. CalculateThis.ai disclaims any liability for damages resulting from the use of this tool.
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