What this calculator does
This calculator finds annual net benefit by subtracting recurring cost from gross annual benefit, then divides it by the initial investment. It also gives simple payback where net benefit is positive.
When to use it
Use it to screen an improvement such as condition monitoring, maintainability redesign, PM optimization, or spares change before preparing a formal capital or operating proposal.
Inputs and formula
Use the same currency basis across all fields. ROI = (annual gross benefit − annual recurring cost) ÷ initial investment
Worked example and interpretation
50,000 invested, 30,000 annual gross benefit, and 8,000 annual recurring cost gives 44% annual simple ROI and about 2.27 years payback. Confirm that benefit is incremental to the proposed change.
Practical notes and limitations
Simple ROI ignores timing, discount rate, tax, benefits erosion, risk, and intangible safety or compliance value. Do not present avoided downtime as certain unless it is backed by a defensible baseline and mechanism of change.