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NPV For A Project With Multiple Cash Outlays




Is it possible to apply NPV to a project with cash outlays over the first two years and incremental cash flows begin in year three?




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NPV For A Project With Multiple Cash Outlays

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Feb 13, 2010
Project Cash Flow Analysis
by: Dee Reavis

Yes, it is certainly possible to do NPV analysis with multiple year investments. It is all a matter of watching the sign of the dollar amounts inputted.

If you entered your initial investment amount as a negative, then you would enter your investment amount during the 1st, 2nd or 3rd year as a negative as well. Your incremental cash flow in ensuing years would be entered as positives. You can try this out at NPV Calculator.




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