Net Present Value worksheet

1. Net present value (NPV): -$13.15

1. Turn each future cash flow into today's dollars, since money later is worth less. Divide it by (1 + r)^k, where k is its quarter number and r = 10%

   $\text{\$3,250.00 ÷ 1.1^1 = \$2,954.55; \$3,600.00 ÷ 1.1^2 = \$2,975.21; \$5,400.00 ÷ 1.1^3 = \$4,057.10}$

2. Add up what all the future cash flows are worth today

   $\frac{\mathrm{\$3,250.00}}{{\left(1+0.1\right)}^1}+\frac{\mathrm{\$3,600.00}}{{\left(1+0.1\right)}^2}+\frac{\mathrm{\$5,400.00}}{{\left(1+0.1\right)}^3}$$=\mathrm{\$9,986.85}$

3. Subtract the initial investment, which is already in today's dollars

   $\mathrm{\$9,986.85}-\mathrm{\$10,000.00}$$=\mathrm{-\$13.15}$

4. Divide what the cash flows are worth today by the initial investment. This profitability index shows the value per dollar put in

   $\frac{\mathrm{\$9,986.85}}{\mathrm{\$10,000.00}}$$=0.9987$

2. Net present value (NPV): $883.02

1. Turn each future cash flow into today's dollars, since money later is worth less. Divide it by (1 + r)^k, where k is its year number and r = 8%

   $\text{\$3,600.00 ÷ 1.08^1 = \$3,333.33; \$5,000.00 ÷ 1.08^2 = \$4,286.69; \$6,000.00 ÷ 1.08^3 = \$4,762.99}$

2. Add up what all the future cash flows are worth today

   $\frac{\mathrm{\$3,600.00}}{{\left(1+0.08\right)}^1}+\frac{\mathrm{\$5,000.00}}{{\left(1+0.08\right)}^2}+\frac{\mathrm{\$6,000.00}}{{\left(1+0.08\right)}^3}$$=\mathrm{\$12,383.02}$

3. Subtract the initial investment, which is already in today's dollars

   $\mathrm{\$12,383.02}-\mathrm{\$11,500.00}$$=\mathrm{\$883.02}$

4. Divide what the cash flows are worth today by the initial investment. This profitability index shows the value per dollar put in

   $\frac{\mathrm{\$12,383.02}}{\mathrm{\$11,500.00}}$$=1.0768$

3. Net present value (NPV): $4,366.89

1. Turn each future cash flow into today's dollars, since money later is worth less. Divide it by (1 + r)^k, where k is its quarter number and r = 12%

   $\text{\$3,000.00 ÷ 1.12^1 = \$2,678.57; \$4,200.00 ÷ 1.12^2 = \$3,348.21; \$6,800.00 ÷ 1.12^3 = \$4,840.11}$

2. Add up what all the future cash flows are worth today

   $\frac{\mathrm{\$3,000.00}}{{\left(1+0.12\right)}^1}+\frac{\mathrm{\$4,200.00}}{{\left(1+0.12\right)}^2}+\frac{\mathrm{\$6,800.00}}{{\left(1+0.12\right)}^3}$$=\mathrm{\$10,866.89}$

3. Subtract the initial investment, which is already in today's dollars

   $\mathrm{\$10,866.89}-\mathrm{\$6,500.00}$$=\mathrm{\$4,366.89}$

4. Divide what the cash flows are worth today by the initial investment. This profitability index shows the value per dollar put in

   $\frac{\mathrm{\$10,866.89}}{\mathrm{\$6,500.00}}$$=1.6718$

4. Net present value (NPV): -$3,133.11

1. Turn each future cash flow into today's dollars, since money later is worth less. Divide it by (1 + r)^k, where k is its year number and r = 12%

   $\text{\$3,000.00 ÷ 1.12^1 = \$2,678.57; \$4,200.00 ÷ 1.12^2 = \$3,348.21; \$6,800.00 ÷ 1.12^3 = \$4,840.11}$

2. Add up what all the future cash flows are worth today

   $\frac{\mathrm{\$3,000.00}}{{\left(1+0.12\right)}^1}+\frac{\mathrm{\$4,200.00}}{{\left(1+0.12\right)}^2}+\frac{\mathrm{\$6,800.00}}{{\left(1+0.12\right)}^3}$$=\mathrm{\$10,866.89}$

3. Subtract the initial investment, which is already in today's dollars

   $\mathrm{\$10,866.89}-\mathrm{\$14,000.00}$$=\mathrm{-\$3,133.11}$

4. Divide what the cash flows are worth today by the initial investment. This profitability index shows the value per dollar put in

   $\frac{\mathrm{\$10,866.89}}{\mathrm{\$14,000.00}}$$=0.7762$

5. Net present value (NPV): $83.62

1. Turn each future cash flow into today's dollars, since money later is worth less. Divide it by (1 + r)^k, where k is its month number and r = 11%

   $\text{\$3,000.00 ÷ 1.11^1 = \$2,702.70; \$4,200.00 ÷ 1.11^2 = \$3,408.81; \$6,800.00 ÷ 1.11^3 = \$4,972.10}$

2. Add up what all the future cash flows are worth today

   $\frac{\mathrm{\$3,000.00}}{{\left(1+0.11\right)}^1}+\frac{\mathrm{\$4,200.00}}{{\left(1+0.11\right)}^2}+\frac{\mathrm{\$6,800.00}}{{\left(1+0.11\right)}^3}$$=\mathrm{\$11,083.62}$

3. Subtract the initial investment, which is already in today's dollars

   $\mathrm{\$11,083.62}-\mathrm{\$11,000.00}$$=\mathrm{\$83.62}$

4. Divide what the cash flows are worth today by the initial investment. This profitability index shows the value per dollar put in

   $\frac{\mathrm{\$11,083.62}}{\mathrm{\$11,000.00}}$$=1.0076$

6. Net present value (NPV): $4,900.26

1. Turn each future cash flow into today's dollars, since money later is worth less. Divide it by (1 + r)^k, where k is its month number and r = 10%

   $\text{\$3,200.00 ÷ 1.1^1 = \$2,909.09; \$5,000.00 ÷ 1.1^2 = \$4,132.23; \$6,800.00 ÷ 1.1^3 = \$5,108.94}$

2. Add up what all the future cash flows are worth today

   $\frac{\mathrm{\$3,200.00}}{{\left(1+0.1\right)}^1}+\frac{\mathrm{\$5,000.00}}{{\left(1+0.1\right)}^2}+\frac{\mathrm{\$6,800.00}}{{\left(1+0.1\right)}^3}$$=\mathrm{\$12,150.26}$

3. Subtract the initial investment, which is already in today's dollars

   $\mathrm{\$12,150.26}-\mathrm{\$7,250.00}$$=\mathrm{\$4,900.26}$

4. Divide what the cash flows are worth today by the initial investment. This profitability index shows the value per dollar put in

   $\frac{\mathrm{\$12,150.26}}{\mathrm{\$7,250.00}}$$=1.6759$

7. Net present value (NPV): $1,687.04

1. Turn each future cash flow into today's dollars, since money later is worth less. Divide it by (1 + r)^k, where k is its year number and r = 12%

   $\text{\$2,750.00 ÷ 1.12^1 = \$2,455.36; \$5,500.00 ÷ 1.12^2 = \$4,384.57; \$4,000.00 ÷ 1.12^3 = \$2,847.12}$

2. Add up what all the future cash flows are worth today

   $\frac{\mathrm{\$2,750.00}}{{\left(1+0.12\right)}^1}+\frac{\mathrm{\$5,500.00}}{{\left(1+0.12\right)}^2}+\frac{\mathrm{\$4,000.00}}{{\left(1+0.12\right)}^3}$$=\mathrm{\$9,687.04}$

3. Subtract the initial investment, which is already in today's dollars

   $\mathrm{\$9,687.04}-\mathrm{\$8,000.00}$$=\mathrm{\$1,687.04}$

4. Divide what the cash flows are worth today by the initial investment. This profitability index shows the value per dollar put in

   $\frac{\mathrm{\$9,687.04}}{\mathrm{\$8,000.00}}$$=1.2109$

8. Net present value (NPV): -$1,499.07

1. Turn each future cash flow into today's dollars, since money later is worth less. Divide it by (1 + r)^k, where k is its year number and r = 8%

   $\text{\$2,600.00 ÷ 1.08^1 = \$2,407.41; \$5,000.00 ÷ 1.08^2 = \$4,286.69; \$7,000.00 ÷ 1.08^3 = \$5,556.83}$

2. Add up what all the future cash flows are worth today

   $\frac{\mathrm{\$2,600.00}}{{\left(1+0.08\right)}^1}+\frac{\mathrm{\$5,000.00}}{{\left(1+0.08\right)}^2}+\frac{\mathrm{\$7,000.00}}{{\left(1+0.08\right)}^3}$$=\mathrm{\$12,250.93}$

3. Subtract the initial investment, which is already in today's dollars

   $\mathrm{\$12,250.93}-\mathrm{\$13,750.00}$$=\mathrm{-\$1,499.07}$

4. Divide what the cash flows are worth today by the initial investment. This profitability index shows the value per dollar put in

   $\frac{\mathrm{\$12,250.93}}{\mathrm{\$13,750.00}}$$=0.891$

9. Net present value (NPV): $4,876.66

1. Turn each future cash flow into today's dollars, since money later is worth less. Divide it by (1 + r)^k, where k is its month number and r = 8%

   $\text{\$3,000.00 ÷ 1.08^1 = \$2,777.78; \$4,200.00 ÷ 1.08^2 = \$3,600.82; \$6,800.00 ÷ 1.08^3 = \$5,398.06}$

2. Add up what all the future cash flows are worth today

   $\frac{\mathrm{\$3,000.00}}{{\left(1+0.08\right)}^1}+\frac{\mathrm{\$4,200.00}}{{\left(1+0.08\right)}^2}+\frac{\mathrm{\$6,800.00}}{{\left(1+0.08\right)}^3}$$=\mathrm{\$11,776.66}$

3. Subtract the initial investment, which is already in today's dollars

   $\mathrm{\$11,776.66}-\mathrm{\$6,900.00}$$=\mathrm{\$4,876.66}$

4. Divide what the cash flows are worth today by the initial investment. This profitability index shows the value per dollar put in

   $\frac{\mathrm{\$11,776.66}}{\mathrm{\$6,900.00}}$$=1.7068$

10. Net present value (NPV): -$1,830.20

1. Turn each future cash flow into today's dollars, since money later is worth less. Divide it by (1 + r)^k, where k is its year number and r = 10%

   $\text{\$3,000.00 ÷ 1.1^1 = \$2,727.27; \$3,250.00 ÷ 1.1^2 = \$2,685.95; \$5,000.00 ÷ 1.1^3 = \$3,756.57}$

2. Add up what all the future cash flows are worth today

   $\frac{\mathrm{\$3,000.00}}{{\left(1+0.1\right)}^1}+\frac{\mathrm{\$3,250.00}}{{\left(1+0.1\right)}^2}+\frac{\mathrm{\$5,000.00}}{{\left(1+0.1\right)}^3}$$=\mathrm{\$9,169.80}$

3. Subtract the initial investment, which is already in today's dollars

   $\mathrm{\$9,169.80}-\mathrm{\$11,000.00}$$=\mathrm{-\$1,830.20}$

4. Divide what the cash flows are worth today by the initial investment. This profitability index shows the value per dollar put in

   $\frac{\mathrm{\$9,169.80}}{\mathrm{\$11,000.00}}$$=0.8336$