Cash Flow Calculations
Month Cash Flows Cash Flows Cash Flows
Initial Investment (20,000.00) (20,000.00) (20,000.00)
June 4,000.00 4,000.00 4,000.00
July 5,000.00 5,000.00 5,000.00
August 10,000.00 10,000.00 10,000.00
September 2,000.00 2,000.00 2,000.00
($2,408.54) ($2,601.22) ($2,601.22)
-- Caution --
NPV Example
Discount Rate: 10%
Time Cash Flow
0 ($200,000.00)
1 20,000.00
2 22,500.00
3 25,000.00
4 27,500.00
5 30,000.00
6 32,500.00
7 35,000.00
8 37,500.00
9 40,000.00
10 42,500.00
NPV = ($19,880.30)
Calculating a Required Initial Investment
Discount Rate: 10%
Time Cash Flow
0 $0.00
1 20,000.00
2 22,500.00
3 25,000.00
4 27,500.00
5 30,000.00
6 32,500.00
7 35,000.00
8 37,500.00
9 40,000.00
10 42,500.00
NPV= $180,119.70
Calculating Value of a Cash Flow with Initial Flow
Rate: 10%
Time Cash Flow
0 $ 30,000.00
1 30,000.00
2 32,500.00
3 32,500.00
4 35,000.00
5 35,000.00
6 40,000.00
7 40,000.00
NPV= $ 197,292.96
Cash Flows with Terminal Values
Rate: 10%
Time Income Flow Capital Flow Cash Flow
0 $ 30,000.00 $ 30,000.00
1 30,000.00 30,000.00
2 32,500.00 32,500.00
3 32,500.00 32,500.00
4 35,000.00 35,000.00
5 35,000.00 35,000.00
6 40,000.00 40,000.00
7 40,000.00 450,000.00 490,000.00
NPV= $ 428,214.11
Cash Flows with a Terminal Value
Rate: 10%
Time Income Flow Capital Flow Cash Flow
0 $ 30,000.00 ($360,000.00) $ (330,000.00)
1 30,000.00 30,000.00
2 32,500.00 32,500.00
3 32,500.00 32,500.00
4 35,000.00 35,000.00
5 35,000.00 35,000.00
6 40,000.00 40,000.00
7 40,000.00 450,000.00 490,000.00
NPV= $ 68,214.11
Multiple Outflows
Rate: 10%
Time Capital Flow Gross Margin Fixed Expenses Cash Flow
0 $ (475,000.00) $ - $ (25,000.00) $ (500,000.00)
1 - - (25,000.00) (25,000.00)
2 - 20,000.00 (25,000.00) (5,000.00)
3 - 40,000.00 (25,000.00) 15,000.00
4 - 100,000.00 (25,000.00) 75,000.00
5 (225,000.00) 175,000.00 (25,000.00) (75,000.00)
6 - 200,000.00 (25,000.00) 175,000.00
7 - 250,000.00 (25,000.00) 225,000.00
8 - 275,000.00 (25,000.00) 250,000.00
9 - 275,000.00 (25,000.00) 250,000.00
10 - 275,000.00 (25,000.00) 250,000.00
NPV= $ 22,347.71
Non-Annual Cash Flows
Effective Annual Interest Rate 7%
Cash Flow Frequency 4
Interest Rate Per Period 1.70585% Quarterly
Period Revenue Flow Capital Flow Cash Flow
0 $ 12,000.00 $ (700,000.00) $ (688,000.00)
1 12,000.00 12,000.00
2 12,000.00 12,000.00
3 12,000.00 12,000.00
4 12,000.00 12,000.00
5 12,000.00 12,000.00
6 12,000.00 12,000.00
7 12,000.00 12,000.00
8 12,000.00 12,000.00
9 12,000.00 12,000.00
10 12,000.00 12,000.00
11 12,000.00 12,000.00
12 900,000.00 900,000.00
NPV: $ 166,099.72
Annualizing the flow
Period Revenue Flow Capital Flow Cash Flow
0 $ (700,000.00) $ (700,000.00)
1 48,000.00 48,000.00
2 48,000.00 48,000.00
3 48,000.00 900,000.00 948,000.00
NPV: $ 160,635.26
Error due to annualization $5,464.46
3.29%
Calculating FV using NPV Function
Rate: 10%
Time Cash Flow Interest Cumulative Balance
0 $ 100,000.00 $ 100,000.00
1 40,000.00 10,000.00 150,000.00
2 30,000.00 15,000.00 195,000.00
3 20,000.00 19,500.00 234,500.00
4 50,000.00 23,450.00 307,950.00
5 20,000.00 30,795.00 358,745.00
6 50,000.00 35,874.50 444,619.50
7 30,000.00 44,461.95 519,081.45
NPV= $ 266,370.86
Future Value $ 519,081.45 (Checks with final balance)
Calculating Equivalent Payments with NPV
Interest Rate: 7%
Cash Flow Frequency: 12
Interest Rate Per Period: 0.56541% Monthly
Payment Type: 1
Time Cash Flow
0 $10,000.00
1 $10,000.00
2 $10,000.00
3 $10,500.00
4 $10,500.00
5 $10,500.00
6 $11,250.00
7 $11,250.00
8 $11,250.00
9 $12,000.00
10 $12,000.00
11 $12,000.00
12
NPV= $127,100.53
Equivalent Single Payment: $10,923.24
Check using PV: $127,100.53