NPV and its Contributions

discount rate (0 - 40%)

0.1

initial year initial outlay ($000's)

1

average sales price ($1-500)

1

sales quantity (ea)

1

manufacturing cost (as % of sales)

0.001

GSA expense (as % of sales)

0.001

year 1

avg sales price ($)

1

sales quantity (ea)

1

manufacturing cost (as % of sales)

0.001

GSA expense (as % of sales)

0.001

year 2

avg sales price ($)

1

sales quantity (ea)

1

manufacturing cost (as % of sales)

0.001

GSA expense (as % of sales)

0.001

year	gross income	mfg cost	SGA expense	oper'g income
initial	0	0	0	0
1	0	0	0	0
2	0	0	0	0

NPV	first 3 years' operating income as fraction of gross income	NPV/cap inv
-1.00	1.00	1.00

Net Present Value (NPV), the sum of discounted cash flows, is an approach used to judge whether to undertake a new product-commercialization project and/or a way to compare the relative value of proposed projects competing for the same resources. The higher the NPV, the better return the project has for the business. This Demonstration allows for the quick computation and visualization of NPV over a three-year period.