iSixSigma

HOW TO CALCULATE NPV ROI?

Six Sigma – iSixSigma Forums Old Forums General HOW TO CALCULATE NPV ROI?

Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • #33073

    zhangchi
    Member

    HOW TO CALCULATE NPV&ROI?THANKS!

    0
    #90400

    Prodosh Basu Roy
    Participant

    Please let me know how to calculate ROI.

    0
    #133537

    Ang
    Participant

    How to Calculate Npv & ROI?

    0
    #133542

    NPV
    Participant

    The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project. NPV analysis is sensitive to the reliability of future cash inflows that an investment or project will yield.  Formula:

     
    NPV compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account. If the NPV of a prospective project is positive, it should be accepted. However, if NPV is negative, the project should probably be rejected because cash flows will also be negative.For example, if a retail clothing business wants to purchase an existing store, it would first estimate the future cash flows that store would generate, and then discount those cash flows into one lump-sum present value amount, say $565,000. If the owner of the store was willing to sell his business for less than $565,000, the purchasing company would likely accept the offer as it presents a positive NPV investment. Conversely, if the owner would not sell for less than $565,000, the purchaser would not buy the store, as the investment would present a negative NPV at that time and would, therefore, reduce the overall value of the clothing company.

    0
    #147559

    MOHAMED FOUAD
    Participant

    Hello
    How to calculate the NPV and IRR

    0
    #152166

    alsuwairhi
    Participant

    I need equations for IRR and NPV calculations that Im using excel as below( think couldnt find my mistake
     

     
    2007
    2008
    2009
    2010
    2011

    Total out flows
    38000
    9600
    41300
    52500
    55500

    Total inflows
    65000
    110000
    180000
    220000
    270000

    Net cash flow
    27000
    100400
    138700
    167500
    214500

    IRR ( Internal Rate of return)(NPV=0)
    -1.65854
    -4.71852
    -2.38147
    -2.207642394
    -2.2806

    IRR% ( Internal Rate of return)(NPV=0)
    -165.854
    -471.852
    -238.147
    -220.7642394
    -228.06

    NPV ( net present value )
    0
    179459.3
    137699.8
    259947.2963
    345118.8

    0
Viewing 6 posts - 1 through 6 (of 6 total)

The forum ‘General’ is closed to new topics and replies.