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DISCOUNTED CASH FLOW (DCF) ANALYSIS MODEL
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COMPUTING NET PRESENT VALUE, INTERNAL RATE OF RETURN
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PROFITABILITY INDEX, AND PAYBACK PERIOD
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INVESTMENT ALTERNATIVE BLANK TEMPLATE
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Line #
Start-up CostsYear 1Year 2Year 3Year 4Year 5Total
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CASH INFLOWS (Incremental net revenue and/or cash savings)
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 1 Gross Revenue $ - $ - $ - $ - $ - $ -
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 2 Deductions from revenue 0 0 0 0 0 0
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 3 Net revenue (1 - 2 = 3) 0 0 0 0 0 0
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 4 Cost savings 0 0 0 0 0 0
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Proceeds from sale of old (or new) equipment
 0 0 0 0 0 0
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 6 Total cash inflow (3 + 4 + 5 = 6) 0 0 0 0 0 0
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CASH OUTFLOWS (incremental cash cost)
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 7 Purchase cost $ -
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 8 Installation cost 0
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 9 Labor 0 0 0 0 0 0
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 10 Supplies 0 0 0 0 0 0
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 11 Maintenance 0 0 0 0 0 0
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 12 Other 0 0 0 0 0 0 0
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 13 Total cash outflow (Total lines 7 thru 12) 0 0 0 0 0 0 0
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 14 NET CASH FLOW ( 6 - 13) 0 0 0 0 0 0 0
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 15 Discount rate and Present Value Factor @8.00%1.0000 0.9259 0.8573 0.7938 0.7350 0.6806
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Net present value of future cash flows (14 x 15)
 $ - $ - $ - $ - $ - $ - $ -
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Cumulative Present Value (to compute payback period)
 $ - $ - $ - $ - $ - $ -
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Payback Period (when cumulative present value is > 0)
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 19 Internal Rate of Return
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using Excel =IRR(range,guess) with range being cash flows
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on line 14 and "guess" being the rate on line 15
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Profitability Index (NPV of Future Cash Flows / Initial Investment)
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Payback Period using discounted cash flows
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