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Discount rate

PROJECT 1
(Insulating Office)
Costs
Discount factor
Discounted costs
Cumulative discounted costs
Benefits
Discount factor
Discounted benefits
Cumulative discounted benefits

4.8%
1
2
3
$18,000.00
$0.00
$0.00
0.95
0.91
0.87
$17,175.57
$0.00
$0.00
$17,175.57 $17,175.57 $17,175.57
$1,600.00
0.95
$1,526.72
$1,526.72

$1,600.00
0.91
$1,456.79
$2,983.51

$1,600.00
0.87
$1,390.07
$4,373.58

Cash flow
Discounted benefits - costs
Cumulative benefits - costs

-$16,400.00
-$15,648.85
-$15,648.85

$1,600.00
$1,456.79
-$14,192.06

$1,600.00
$1,390.07
-$12,802.00

NPV
ROI

-$4,699.92
-27%

Year
4
5
6
7
8
9
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
0.83
0.79
0.75
0.72
0.69
0.66
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$17,175.57 $17,175.57 $17,175.57 $17,175.57 $17,175.57 $17,175.57
$1,600.00
0.83
$1,326.40
$5,699.98

$1,600.00
0.79
$1,265.65
$6,965.63

$1,600.00
0.75
$1,207.68
$8,173.31

$1,600.00
$1,600.00
$1,600.00
0.72
0.69
0.66
$1,152.37
$1,099.59
$1,049.22
$9,325.68 $10,425.26 $11,474.49

$1,600.00
$1,326.40
-$11,475.59

$1,600.00
$1,265.65
-$10,209.94

$1,600.00
$1,207.68
-$9,002.26

$1,600.00
$1,152.37
-$7,849.90

$1,600.00
$1,099.59
-$6,750.31

$1,600.00
$1,049.22
-$5,701.08

Total
10
$0.00 $18,000.00
0.63
$0.00 $17,175.57
$17,175.57
$1,600.00 $16,000.00
0.63
$1,001.17 $12,475.66
$12,475.66
$1,600.00
$1,001.17
-$4,699.92

-$2,000.00

Year

Mortgage value without investment


Mortgage value with investment
$
40,000.00 $
30,000.00
1 $
42,600.00 $
31,950.00
2 $
45,369.00 $
34,026.75
3 $
48,317.99 $
36,238.49
4 $
51,458.65 $
38,593.99
5 $
54,803.47 $
41,102.60
6 $
58,365.69 $
43,774.27
7 $
62,159.46 $
46,619.60
8 $
66,199.83 $
49,649.87
9 $
70,502.82 $
52,877.11
10 $
75,085.50 $
56,314.12

Benefit based on investment


$
$
$
$
$
$
$
$
$
$

650.00
692.25
737.25
785.17
836.20
890.56
948.44
1,010.09
1,075.75
1,145.67

PROJECT 1
(Insulate Office)
Cumulative discounted costs
Cumulative discounted benefits

1
$17,175.57
$1,526.72

2
$17,175.57
$2,983.51

3
$17,175.57
$4,373.58

Payback of Project 1 (Insulate Office


$20,000.00
$18,000.00
$16,000.00
$14,000.00
$12,000.00
$10,000.00
$8,000.00
$6,000.00
$4,000.00
$2,000.00
$0.00

Cumulative discounted costs

PROJECT 2
(Mortgage Payment)
Cumulative discounted costs
Cumulative discounted benefits

Cumulati

1
2
3
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509

Payback of Project 2 (Mortgage


$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
1

Cumulative discounted costs

PROJECT 3
(Invest in Business)

Cumulative

Cumulative discounted costs


Cumulative discounted benefits

Err:509
Err:509
Err:509
Err:509
Err:509
Err:509

Payback of Project 3 (Inve


$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
1

Cumulative discounted costs

PROJECT 4
(Savings - no investment)
Cumulative discounted costs
Cumulative discounted benefits

Cu

1
2
3
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509

Payback of Project 4 (Savi


$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
1

Cumulative discounted costs

Cumulative

4
$17,175.57
$5,699.98

Year
5
6
$17,175.57
$17,175.57
$6,965.63
$8,173.31

7
$17,175.57
$9,325.68

8
$17,175.57
$10,425.26

9
$17,175.57
$11,474.49

ct 1 (Insulate Office)

Payback Graph of Project 1 (Ins

unted costs

10

Cumulative discounted benefits

Year
4
5
6
7
8
9
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509

roject 2 (Mortgage Payment)

Payback Graph of Project 2 (Mo

ted costs

10

Cumulative discounted benefits

Year
5

Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509

ck of Project 3 (Invest in Business)

Payback Graph of Project 3 (Inv

discounted costs

10

Cumulative discounted benefits

Year
4
5
6
7
8
9
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509
Err:509

k of Project 4 (Savings)

Payback Graph of Project 4 (Sav

ted costs

Cumulative discounted benefits

10

10
$17,175.57
$12,475.66

back Graph of Project 1 (Insulate Office)

10
Err:509
Err:509

back Graph of Project 2 (Mortgage Payment)

10

Err:509
Err:509

back Graph of Project 3 (Investment in Business)

10
Err:509
Err:509

back Graph of Project 4 (Savings)

Criteria
Projects calculated NPV
Projects calculated ROI
Payback analysis

Weight
Method 1 Method 1 Method 2 Method 2
35%
25
8.75
15
5.25
25%
25
6.25
25
6.25
40%
25
10
20
8.00
25
19.50

Method 4

Method 3

Payback analy

Projects calcu
Method 2

Projects calcu

Method 1

10

15

20

25

30

35

40

45

Method 3 Method 3 Method 4 Method 4


35
12.25
40
14
40
10
20
5
50
20
35
14
42.25
33

Payback analysis
Projects calculated ROI
Projects calculated NPV

40

45

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