[Verse 1]
When Sarah evaluates machinery for her factory floor
She needs to know how quickly cash will even out the score
Simple payback counts the years till investment breaks through
Divide initial cost by annual cash flow, straight and true
[Chorus]
Payback period tells the tale, how long till money's back
Profitability index scales the value on each track
Discount future dollars down, present value holds the key
PI above one means proceed, below means let it be
[Verse 2]
But inflation steals the thunder from tomorrow's dollar bills
Discounted payback method cures those economic ills
Apply the cost of capital to shrink each future year
Till cumulative cash flows make breakeven crystal clear
[Chorus]
Payback period tells the tale, how long till money's back
Profitability index scales the value on each track
Discount future dollars down, present value holds the key
PI above one means proceed, below means let it be
[Bridge]
Three machines compete for funding, budgets running tight
Calculate PI for ranking, which deserves the spotlight?
Present value of cash inflows over cost invested
Higher ratios win the race, capital's protected
[Verse 3]
Machine A pays back in three years, B takes four to shine
But discounted payback stretches those recovery lines
A needs four point two with discounts, B needs five point eight
PI reveals the hidden truth behind investment fate
[Chorus]
Payback period tells the tale, how long till money's back
Profitability index scales the value on each track
Discount future dollars down, present value holds the key
PI above one means proceed, below means let it be
[Outro]
Payback speed and profit ratio, tools for CPA minds
Ranking projects, allocating where the best return we find