NPV/IRR Calculator
Overview
The NPV/IRR Calculator skill provides comprehensive financial analysis for project investment decisions. It calculates key financial metrics including Net Present Value, Internal Rate of Return, payback periods, and profitability indices to support business case development and portfolio prioritization.
Capabilities
Core Financial Metrics
- Calculate Net Present Value (NPV) with configurable discount rates
- Calculate Internal Rate of Return (IRR)
- Calculate Modified Internal Rate of Return (MIRR)
- Calculate payback period (simple and discounted)
- Calculate Profitability Index (PI) / Benefit-Cost Ratio
Cash Flow Analysis
- Generate cash flow projections
- Model operating vs. capital expenditures
- Calculate cumulative cash flows
- Support irregular cash flow timing
- Handle multiple currency conversions
Sensitivity Analysis
- Perform sensitivity analysis on key assumptions
- Generate tornado diagrams
- Calculate break-even points
- Model scenario comparisons (base, optimistic, pessimistic)
- Assess assumption risk ranges
Advanced Features
- Support weighted average cost of capital (WACC)
- Calculate economic value added (EVA)
- Model inflation adjustments
- Compare mutually exclusive projects
- Generate investment summary reports
Usage
Input Requirements
- Initial investment amounts
- Projected cash flows by period
- Discount rate(s)
- Project duration
- Optional: Inflation rates, tax considerations
Output Deliverables
- NPV calculation with present value breakdown
- IRR and MIRR calculations
- Payback analysis (simple and discounted)
- Profitability Index
- Sensitivity analysis charts
Example Use Cases
- Business Case: Calculate project financial viability
- Portfolio Selection: Compare project investments
- Go/No-Go Decision: Evaluate investment threshold
- Budget Justification: Demonstrate financial benefits
Process Integration
This skill integrates with the following processes:
- Business Case Development
- budget-development.js
- portfolio-prioritization.js
- benefits-realization.js
Dependencies
- Financial mathematics libraries
- Numerical computation utilities
- Visualization libraries
- Currency conversion services
Related Skills
- SK-004: EVM Calculator
- SK-011: Benefits Tracking Dashboard
- SK-013: Portfolio Optimization