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NPV & IRR
Evaluate a project with an initial outlay and level annual cash flows.
Your numbers
$
$
%
Net present value
$23,549
Cumulative discounted value
grows to $23.5K
- Internal rate of return
- 15.34%
- Simple payback
- 3.8 years
- Undiscounted total
- $72,000
A positive net present value means the project clears your hurdle rate, so the money is worth tying up.
In plain English
NPV & IRR explained simply
A dollar today is worth more than a dollar next year, because today's dollar can start growing right away. These two numbers judge a project using that idea.
For example
If a project's NPV is above zero, it's expected to make you money after accounting for time and risk.
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