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Project Details – ROI page

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Use the Project Details ROI page to view or revise spending and benefit plan data, and to review project ROI and payback period.

Field Definitions

Specify the timescale for entering ROI spending and benefit plans
Choose the time interval for recording the spending and benefit plan information used for ROI analysis. This can be Month, Quarter, or Year.
 
Annual Discount Rate
The cost of capital for your business or an investment interest rate. Valid values are 0 to 100.

This rate is used to calculate total Spending Plan Present Value and Total Benefit Plan Present Value. When you change this value, Total Spending Plan PV, Total Benefit Plan PV, NPV, ROI, and Payback Period are recalculated.

Discount Application Period
The time interval (Month, Quarter, or Year) used to determine how the discount rate is applied in calculating Present Value for the spending and benefit plans. When you change this value, Total Spending Plan PV, Total Benefit Plan PV, NPV, ROI, and Payback Period are recalculated.
 
Project Start Date
For a project that has not started, this is the planned start date; for an in progress project, this is the actual start date.
 
Date
Time interval for the corresponding spending and benefit plans: Year/Month, Year/Quarter, Decade/Year.

Note: Regardless of the timescale selected for display, spending and benefit plan values are stored in the database by month. Quarterly and decade totals are computed by totaling the respective 3-month or 12-month periods. When you edit a value on a year/quarter timescale, the new value is stored into the database in the first month of the quarter; the remaining two months store a value of zero. Likewise, when you edit a value on a decade/year timescale, the new value is stored into the database in the first month of the year; the remaining eleven months store a value of zero.

Spending Plan
Projected project spending for the corresponding time period. Numbers can be positive or negative, and should be entered as non-discounted dollars.
 
Benefit Plan
Projected project benefit for the corresponding time period. Numbers can be positive or negative, and should be entered as non-discounted dollars. Typically, the benefit plan begins after the project has completed.
 
Total Present Value (Discounted)
The calculated total of spending and benefit plans for all periods, reduced to current dollars by the discount rate.

Current dollars for individual spending plan and benefit plan periods are calculated as:

      Plan period $/(1+discount rate)n

where n = the current discount application period value (for example, for yearly over 8 years, values are calculated for n = year 0, year 1, year 2, ... year 7). The project start date is used as the beginning of period 0. If the project start date or discount rate are changed, Total Spending Plan PV, Total Benefit Plan PV, NPV, ROI, and Payback Period are recalculated.

Net Present Value
The difference between present value of the total projected cash flow and present value of the initial investment. Calculated as Total Benefit Plan PV – Total Spending Plan PV.
 
Return on Investment
Calculated as NPV/Total Spending Plan PV.
 
Payback Period
The period of time required to recover the initial investment amount.

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