Financial analysis Example: Given the following financial analysis chart for project A, Answer the following Questions: NPV Financial Analysis of Project A 45% Discount rate Total Costs Discount factor Discounted costs 0 $126 1.00 126 Year 1 2 3 $90 $80 $74 0.69 0.476 0.328 $62 $38 $24 $250 Benefits Discount factor Discounted benefits $0 1.00 0.0 $194 0.69 $134 $194 $74 0.476 0.328 $92 $24 $250 Discounted benefits - costs Cumulative benefits - costs -126 -126 72 -54 54 0 0 0 A- What is the net present value of the project A? Project NPV after 3 years = Discounted benefits - Discounted benefits costs = 0 3 = B- What is the Return-on-Investment ROI of project A? ROI after 3 years = Discounted benefits - Discounted costs/ Discounted costs = 0 C- What is the payback period of project A? Payback Year = 2