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Capital investment appraisal (NPV and IRR)

Enter investment, volume, price, costs, taxes and financing to get the year-by-year income statement and cash flow, NPV, IRR, payback and which variables drive the result.

Pre-sizing and estimating tool: results do not replace design, calculations or reports signed by a licensed professional, nor verification against the applicable codes and standards.

Preliminary estimate
Project
Revenue
Costs
Taxes

In the U.S. sales tax is collected from customers and is not company revenue; leave zero unless gross receipts taxes apply.

Financing
Appraisal
—Project NPV
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Cash flow and payback

Bars: each year’s cash flow. Lines: cumulative and discounted cumulative cash; where they cross zero is payback.

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Results over time

Net revenue, EBITDA and net income by year; EBITDA margin on the right axis.

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Where the revenue goes

Sum of all years, from gross revenue to net income.

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Financing: debt service and coverage

Interest and principal paid each year, loan balance and DSCR on the right axis.

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NPV profile

NPV versus discount rate; where the curve crosses zero is the IRR.

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What moves NPV the most

Each variable changed on its own, down and up. The longest bars are the biggest risks.

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Sensitivity curves

NPV as each variable changes alone from −30% to +30%. The steeper the line, the more the project depends on it.

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Margin of safety

How much each variable can worsen, on its own, before project NPV reaches zero.

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Sensitivity over time

Discounted cumulative cash with the chosen variable below and above its current value. Where each line crosses zero is that scenario’s discounted payback.

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Two-way sensitivity table

Two variables at once, with your case in the center.

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Monte Carlo simulation

Price, volume, costs and investment drawn at the same time within the chosen range. Resulting NPV distribution.

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Monte Carlo over time

Discounted cumulative cash: bands with 50% and 80% of runs, median and your case. Shows the probability that the investment has paid back by each year.

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Probability that the investment has paid back

Share of runs with positive discounted cumulative cash in each year.

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Income statement and cash flow

Evaluate a ready-made cash flow (paste from Excel)

If you already have the project cash flow, paste the year and cash-flow columns (negative for outflows). NPV, IRR and payback use the hurdle rate from the form, without the assumptions above.

See what was read

The report gathers this page's inputs, results, equations, assumptions and references, with fields for project, engineer and revision. In the print dialog, choose Save as PDF.

Method, assumptions and references

Equations used

EBITDA = net revenue − variable costs − fixed costs − expenses; EBIT = EBITDA − depreciation
Project cash flow = EBIT − tax on EBIT + depreciation − capex ± working capital + after-tax residual value
Equity cash flow = net income + depreciation − capex ± working capital + loan proceeds − principal repaid
NPV = Σ Fₜ ÷ (1 + r)ᵗ; IRR: NPV(IRR) = 0; modified IRR with reinvestment at r
U.S.: (21% federal + state − federal × state) on taxable income; NOL up to 80%; interest deductible up to 30% of EBITDA

Assumptions and limits

  • Nominal values with the escalations entered; the hurdle rate must be nominal in the same currency.
  • Tax paid in the same year; local taxes and incentives (credits, state abatements) not included.
  • Monte Carlo: price, volume, variable cost, fixed costs and investment drawn independently from triangular distributions around the entered values; fixed seed for reproducible results.
  • Capital gain on residual value taxed at the marginal rate. Study estimate: the final model should be reviewed by your tax advisor.

Standards and technical documents

  • Brealey, R. A.; Myers, S. C.; Allen, F. Principles of Corporate Finance. McGraw-Hill
  • Damodaran, A. Applied Corporate Finance. Wiley
  • Assaf Neto, A. Finanças Corporativas e Valor. Atlas

U.S. regulations

  • IRC §11 (21% corporate rate), §172 (NOL, 80% limit), §163(j) (interest limit, EBITDA-based from 2025)
  • IRC §168(k) as amended by the One Big Beautiful Bill Act (2025): permanent 100% bonus depreciation for property acquired after January 19, 2025
  • IRS Publication 946: MACRS

Frequently asked questions

How do I calculate project NPV?

Project each year’s cash flow (capex, revenue, costs, taxes, working capital and residual value) and discount each at the hurdle rate. The sum is NPV: if positive, the project beats the alternative.

What discount rate should I use?

Your opportunity cost of capital, usually the company’s weighted average cost of capital (WACC), possibly with a premium for project risk.

How does 100% bonus depreciation change the result?

It moves the whole tax deduction to the first year, cutting early taxes and raising NPV and IRR even though total depreciation is the same.