Investment Tools and Analysis - Investment Profitability and Worth Measures

Investment Tools and Analysis
Investment Profitability and Worth Measures

This financial analysis measures the four most common investment valuations used to evaluate the return or payback of an investment.

Enter the cells with a yellow highlight





	Internal Rate of Return

Scenario #1		Scenario #2
	Initial Investment		Initial Investment
	Initial Investment		Initial Investment
Cash Inflows:		Cash Inflows:
period #1:		period #1:
period #2:		period #2:
period #3:		period #3:
period #4:		period #4:
period #5:		period #5:
period #6:		period #6:
period #7:		period #7:
period #8:		period #8:
period #9:		period #9:
period #10:		period #10:
period #11:		period #11:
period #12:		period #12:

Internal Rate of Return:		Internal Rate of Return:

Cost of Capital:		Cost of Capital:
(min. required rate of return)		(min. required rate of return)

Accept/ Reject:		Accept/ Reject:

Internal rate of return (IRR) is the rate of interest that equates the initial investment with the present value of future cash inflows.
Note that the initial investment is given as a negative dollar amount.



	Net Present Value

Scenario #1		Scenario #2

Initial Investment:		Initial Investment:
Initial Investment:		Initial Investment:
Cash Inflows:		Cash Inflows:
period #1:		period #1:
period #2:		period #2:
period #3:		period #3:
period #4:		period #4:
period #5:		period #5:
period #6:		period #6:
period #7:		period #7:
period #8:		period #8:
period #9:		period #9:
period #10:		period #10:
period #11:		period #11:
period #12:		period #12:

Net Present Value:		Net Present Value:

Cost of Capital:		Cost of Capital:
(min. required rate of return)		(min. required rate of return)

Accept/ Reject:		Accept/ Reject:

Profit Index:		Profit Index:

Net Present Value (NPV) is the excess of the present value of cash inflows generated over the amount of the initial investment.
Note that the initial investment is given as a negative dollar amount.



	Accounting Rate of Return

Scenario #1		Scenario #2

Initial Investment:		Initial Investment:
Initial Investment:		Initial Investment:

Annual:		Annual:
Cash Inflows:		Cash Inflows:
Depreciation:		Depreciation:

ARR:		ARR:

ARR using 1/2		ARR using 1/2
investment:		investment:

The Accounting Rate of Return (ARR) measures profitability by relating the required investment to the future annual net income.



	Payback Period

Scenario #1		Scenario #2

Cost of Investment:		Cost of Investment:
Cost of Investment:		Cost of Investment:

Annual cash savings or increased revenue:		Annual cash savings or increased revenue:
Annual cash savings or increased revenue:		Annual cash savings or increased revenue:
year #1:		year #1:
year #2:		year #2:
year #3:		year #3:
year #4:		year #4:
year #5:		year #5:
year #6:		year #6:
year #7:		year #7:
year #8:		year #8:
year #9:		year #9:
year #10:		year #10:
year #11:		year #11:

Payback Period:		Payback Period:
	years		years

The Payback Period measures the length of time required to recover the amount of the initial investment.
The shortest payback period is desired.

Automatic recalculation

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