Payback vs NPV rate 10%

T0 T1 T2 T3 payback NPV formula

-2000 500 500 5000 ₹ 2,624.34 =NPV($E$1,B3:D3)+A3
-2000 500 1800 0 ₹ -57.85 =NPV($E$1,B4:D4)+A4 in excel, for NPV calculation, ad
-2000 1800 500 0 ₹ 49.59 =NPV($E$1,B5:D5)+A5

IRR
T0 -200 (outflow)
T1 50 (inflow)
T2 100 (inflow)
T3 150 (inflow)
IRR 19.44% =IRR(B9:B12)

**Profitabilty Index Rate 10%

T0 T1 T2 PV PI
A -10 30 5 24.59 2.5
B -5 5 20 19.67 3.9
C -5 5 15 14.75 3.0
in excel, for NPV calculation, add the time 0(T0) value separately. Include CF from T1 to Tn with the rate
 RATE 10%
project T0 T1 IRR NPV @ 10%
E -10000 20000 100% ₹ 8,181.82
F -20000 35000 75% ₹ 11,818.18

F-E -10000 15000 50% F-E is highly profitable, as it is giving more in return (additio
Considering IRR here looks beneficial, comparing 100% with 75%
But, when NPV is calculated with the required return, NPV is lot beneficial
 iving more in return (additional or incremental 50%) is F-E beneficial for the organization

NPV is lot beneficial

 NPV
1 2 3 4 5
Units 5 8 12 10 6
SP(20+g=2%) 20 20.4 20.81 21.22 21.65
Sale Revenue (Qnty*Price) 100 163.2 249.72 212.2 129.9
Op. Cost PU(10+g=10%) 10 11 12.1 13.31 14.64
Op. Cost(10+g=10%) 50.00 88.00 145.20 133.10 87.84
MACR 0.20 0.32 0.19 0.12 0.12
Depreciation 20.00 32.00 19.20 11.52 11.52
EBIT(Revenue-Expense-Depreciation) 30 43.2 85.32 67.58 30.54
Taxes @34% (EBIT-Taxes) 10.20 14.69 29.00 22.99 10.38
NOPAT 19.80 28.51 56.30 44.63 20.15
Capex+WC 260 0.00 6.32 8.65 -3.75 -192.98
FCF (Free Cashflow) -260 39.80 54.19 66.85 59.90 224.65
NPV @10% 51.59
C4*C5

C4*C7

C6-C8-C10

C13+C10-C14