Does this calculator prove predictive-maintenance savings?

No. It performs arithmetic on supplied incremental cash-flow assumptions. The baseline, attribution, evidence, risk, and uncertainty must be assessed separately.

What does discounted return on outlays mean here?

It is the calculator-defined ratio NPV divided by the present value of initial and recurring outlays. It is not IRR and is not presented as a universal ROI definition.

How are annual cash flows timed?

The model treats each constant annual benefit and recurring cost as occurring at the end of each year. Residual value occurs at the end of the selected horizon.

Is simple payback discounted?

No. Simple payback is initial investment divided by constant annual net cash flow. It ignores discounting, residual value, and cash flows after payback.

Is the HM Treasury Green Book a commercial PdM standard?

No. It is cited only as an official, transparent example of lifetime appraisal, discounting, and risk and sensitivity treatment. This calculator is not an ISO or HM Treasury compliance tool.

Documented engineering arithmetic

Constant Annual Cash-Flow Calculator

A transparent present-value model for a proposed predictive-maintenance programme or another investment. It calculates only from your documented incremental assumptions; it does not predict or prove savings.

End-of-year cash flowsExplicit metric definitionsNot an ISO formula

Model results

Net present value (NPV)

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Discounted return on outlays

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Benefit-cost ratio

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PV gross benefits

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PV total outlays

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Annual net cash flow B − C

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Simple payback

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PV residual value

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Model and timing

For years t = 1 … N, the model places the constant annual gross benefit B and recurring incremental cost C at each year-end. Initial investment C₀ occurs at time 0. Residual value R occurs at the end of year N. With d = r/100:

PV(B) = Σ[B/(1+d)^t] PV(C) = Σ[C/(1+d)^t] PV(R) = R/(1+d)^N
PV(outlays) = C₀ + PV(C)
NPV = PV(B) + PV(R) − PV(outlays)
Discounted return on outlays = NPV / PV(outlays) × 100%
BCR = [PV(B) + PV(R)] / PV(outlays)
Simple payback = C₀/(B−C) years, only when B−C > 0

Kiekis	Meaning and unit
C₀	Incremental investment paid at time 0; currency units
B	Constant annual gross incremental benefit; currency units/year
C	Constant annual recurring incremental outlay; currency units/year
N	Appraisal horizon; whole years
r	Annual discount rate entered as percent/year
R	Residual value received at end of year N; currency units

Boundary: these are deterministic arithmetic outputs, not proof that maintenance caused a benefit. The model excludes taxes, financing, depreciation, uneven cash flows, downtime probability, confidence intervals, and non-monetised effects. Use a dated baseline, avoid double counting, and perform sensitivity/risk analysis before a decision.

What “ROI” means on this page

“Discounted return on outlays” is deliberately labelled and defined as NPV divided by PV(outlays). ROI has multiple conventions; this result is not IRR, accounting ROI, or a guaranteed PdM return. BCR and NPV are shown separately so the denominator cannot be mistaken.

Source classification

This is general discounted cash-flow arithmetic, not a formula prescribed by ISO. HM Treasury’s Green Book (2026) is an official methodological reference for lifetime costs and benefits, discounting, NPV/BCR, uncertainty and sensitivity analysis. Its public-sector scope and prescribed rates are not imported as commercial PdM defaults. See also the official discounting guidance. Accessed 13 July 2026.

For C₀ = 100, B = 50/year, C = 10/year, N = 5, r = 0% and R = 0: PV(B) = 250, PV(outlays) = 150, NPV = 100, discounted return on outlays = 66.6667%, BCR = 1.6667, annual net cash flow = 40/year, and simple payback = 2.5 years. This is an arithmetic test case, not a typical plant claim.

No. It performs arithmetic on supplied incremental cash-flow assumptions. Establish the counterfactual baseline and attribution with project evidence.

Plant costs, failure consequences, avoided events and evidence quality are project-specific. Unreferenced presets would create false precision and could bias a decision.

No. It ignores discounting and residual value. If the constant annual net cash flow is non-positive, there is no simple payback under this model.

No. Use real cash flows with a real discount rate, or nominal cash flows with a nominal rate, all in the same currency and price basis.

Documented Constant Annual Cash-Flow Calculator

Model results

Model and timing

What “ROI” means on this page

Source classification

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