What I am trying to figure out is if I do a complete buyout of a particular business then how long would it take in net income for me to break even on my investment assuming a certain rate of income growth each year.
The variables we know in this equation are 1. the cost to buy the business 2. the current yearly net income of the business 3. the assumed yearly growth rate of net income. The variable we are solving for is the number of years it would take for the accumulated net income to equal the cost of the business.
A simple compound interest formula won't work on this problem because it will only say when the net income itself for one year is the same as the cost of the business which will obviously take many years. Can anyone help me solve for this?