- Why is Project As NPV higher than Project Es NPV?

- Why is Project As NPV lower than Project Cs NPV?

- Why is Project As NPV lower than Project Bs NPV?

- Why is Project Bs NPV higher than Project Ds NPV?

- Why is Project Fs Cash Flows all the same for Years 1 through 5?

A D E F. G H | J K L M N Q R S T U V W in millions in millions 0 3 4 5 Year 0 1 2 5 Year CF PV 1 100 2 105 3 121 4 133 -100 5% 10% 110 116 79 122 75 Project B Growth Rate Discount Rate Project Value 10% 5% 100 95 110 100 146 115 91 87 83 105 110 -100 315 CF PV NPV NPV Excel NPV -100 -100 424 424 in millions NPV Excel 315 in millions 0 1 2 3 4 0 1 2 3 5 Year CF PV 5 122 Year CF 5% 100 -100 110 105 87 110 83 116 79 Project D Growth Rate Discount Rate Project Value 5% 5% 100 95 105 95 4 116 95 122 95 10% 91 75 PV 95 NPV NPV Excel -50 -50 365 365 in millions NPV NPV Excel 1 2 Project A 3 Growth Rate 4 Discount Rate 5 Project Value 6 7 8 Project C 9 Growth Rate 10 Discount Rate 11 Project Value 12 13 14 Project E 15 Growth Rate 16 Discount Rate 17 Project Value 18 19 20 21 22 23 24 25 -100 376 376 in millions 4 Year 1 4 Year CF 0 -100 1 100 2 105 3 110 5 122 2 100 3 100 5 100 116 0% 100 5% 20% Project F Growth Rate Discount Rate Project Value CF PV 0 -100 -100 333 100 95 PV 83 73 64 56 49 5% 91 86 82 78 -100 225 NPV NPV NPV Excel NPV Excel 225 333 "NPV" formula is an Excel SUM function "NPV Excel" formula is based on an Excel NPV function. It is incomplete. You have to add " + the Year 0 CF" at the end. NPV and NPV Excel should calculate the same result. Using both is a check on your work. "Year 0 CF" is the initial investment in the project, such as the cost to build the factory. It is a negative number because it is Cash Outflow