Project inputs
Decision measures
The NPV difference is relative to the original fictional sample. Positive NPV means the forecast cash flows exceed the assumed required return; it does not remove execution risk.
Cash flows and debt
On a phone, swipe the table sideways to see years 1 to 3.
| Measure | Year 0 | Year 1 | Year 2 | Year 3 |
|---|
Interest uses opening loan balance; principal is repaid in three equal annual amounts. Coverage uses operating cash before salvage.
Use this in a workshop
- At what discount rate does NPV change sign?
- If year 2 cash falls 20%, is the project still attractive?
- What does debt coverage reveal that NPV alone does not?