Discount a series of cash flows back to today. Year 0 is your initial outlay (negative); every year after is a projected return. Gives NPV , IRR , discounted payback, and a sensitivity curve showing how the NPV moves as the discount rate changes.
Cash Flows
Net Present Value at 10%
$29,078.68
Creates value at this discount rate.
IRR
19.71%
hurdle 10%
Payback
4.0y
discounted
Undiscounted
$75,000
sum of flows
Time Cost
$45,921
lost to discounting
Cash Flow vs Present Value
NPV vs Discount Rate (crosses zero at the IRR)
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