Where does the NPV come from? Or how is it obtained? is it value selected by me the project manager?

Return on Investment (ROI) is calculated by dividing the net present value (NPV) of the project by the total project cost. The NPV is the difference between the present value of the cash inflows from the project and the present value of the cash outflows of the project.

To calculate the ROI for a $100,000 project with a 10% discount rate and 6-8 months completion period, you can use the following formula:

ROI = (NPV / Project Cost) x 100

For example, if the NPV of the project is $25,000, then the ROI would be calculated as follows:

ROI = ($25,000 / $100,000) x 100 = 25%.

Where does the NPV come from? Or how is it obtained? is it value selected by me the project manager?

Figure 2-6. Detailed NPV Calculations Discount rate 10% Year PROJECT 1 H 2 3 4 5 Total Benefits S $ 2,000,000 $ 2,000,000 $ 2,000,000 $2,000,000 $ 8,000,000 Discount factor 0.91 0.83 0.75 0.68 0.62 Discounted benefits $ 1,652,893 $ 1,502,630 $ 1,366,027 $1,241,843 $ 5,763,392 Costs $ 4,000,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 6,000,000 Discount factor 0.91 0.83 0.75 0.68 0.62 Discounted costs $ 3,636,364 $ 413,223 $ 375,657 $ 341,507 $ 310,461 $ 5,077,212 Total discounted benefits - costs, or NPV $ 686,180 Note: The discount factors are not rounded to two decimal places. They are calculated using the formula discount factor =1/(1+discount rate)^year