Model your production capacity, operating costs and investment budget. See payback period, unit production cost, break-even point and return on investment instantly.
Payback shows when the initial investment is recovered from annual operating net cash flow. The correct method is not dividing investment by annual profit but tracking cumulative cash flow year by year and finding where it crosses zero — because a new plant rarely runs at full capacity in year one.
Simple annual ROI is annual operating cash profit divided by total initial investment and ignores the time value of money. IRR is the discount rate that makes the project's net present value zero; it accounts for the timing of cash flows. So for investments with a ramp-up period IRR is more realistic while ROI is easier to grasp.
Unit production cost is total annual operating cost divided by annual net sellable output. Operating cost covers both variable items that scale with production (raw material, packaging, energy) and fixed items that do not (personnel, maintenance, rent, insurance). Scrap and yield losses reduce the denominator and therefore raise unit cost directly.
Break-even production equals total annual fixed cost divided by unit contribution margin, where contribution margin is selling price minus unit variable cost. If the contribution margin is zero or negative there is no break-even point: every additional unit increases the loss, and the selling price or variable cost structure must be fixed first.