Your cost of finance or the minimum return you expect.
Net cash flow in each year (PKR)
Cash coming in less cash going out. Use a minus sign for a year with a net outflow.
Net present value (NPV)Rs 0
Internal rate of return (IRR)-
Payback period-
Profitability index-
Need this as a full feasibility study or a financial model your bank or investors will accept? A partner can take it from here.
Key measures
Reading the results
| NPV | The project’s value in today’s money after paying back the investment and your required return. Above zero means it adds value. |
| IRR | The return the project earns each year. Compare it with your required return or cost of finance. |
| Payback | How long it takes for the cash coming in to cover the initial investment, before discounting. |
| Profitability index | Present value of future cash flows divided by the investment. Above 1.00 means the project earns more than it costs. |
Good to know
How this tool works
- The figures already filled in are an example. Replace them with your own investment and cash flows.
- The initial investment is treated as spent today (year 0). Each later cash flow is treated as arriving at the end of its year and is discounted at your required return.
- IRR is shown only when the cash flows change from negative to positive in a way that gives a clear answer. Unusual patterns of cash flow can have no IRR or more than one.
- Use cash flows after tax and after any further investment the project needs, but before financing costs, because the required return already covers the cost of finance.
Need a full feasibility study or a financial model for lenders and investors? See our Financial Advisory service.
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