Capital Budgeting Decision Model
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- Capital Budgeting
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- Capital Budgeting
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- Instruction
General overview
The capital budgeting model is constructed to evaluate potential major projects or investments that would require capital budgeting before they are approved or rejected, it helps CEO, CFO and entrepreneurs to assess a prospective project’s cash flow to determine whether the potential returns that would be generated meet a sufficient target benchmark
The capital budgeting model allows the user to calculate the net present value (NPV), internal rate of return (IRR), regular payback, discounted payback and profitability index from simple cash flow stream with dynamic investment decision
The model helps the users to avoid failure or going out of business and improve the power for knowing the numbers to make business decision
The template is fully-editable / customizable model
Inputs
- Update the general info in the Front Page
- Enter the initial investment in the green cells on cell C8 & C9
- Enter the discount rate element in the green cells from cell C19 to cell C27
- Enter the cash flow in the green cells from cell E13 to cell N13, this model is for maximum 10 years investment
Outcome
- Weighted average cost of capital or Discount rate
- Regular payback period
- Discounted payback period
- Net present value NPV
- Internal rate of return IRR
- Profitability index PI
- Investment criteria and decision
- Capital budgeting ranking between small firm and big firm
- Dashboard with 3 scenario analysis by choosing the selection box showing on top on the chart
Conclusion and customization
Highly versatile, very sophisticated financial template and friendly user
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