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NPV Analysis Calculator

Net Present Value - Gas Processing Investment

NPV Analysis Calculator
Evaluates capital investment projects using discounted cash flow (DCF) analysis per standard corporate finance methodology. Calculates NPV, IRR, MIRR, discounted payback, and profitability index with tax-adjusted cash flows and MACRS depreciation schedules per IRS Publication 946.

Capital Investment

$
$
$
years

Revenue & Operating Costs

$/year
%/year
$/year
$/year
%/year

Financial Parameters

%
%
%
years

Core Formulas

NPV = ฮฃ[CFโ‚œ/(1+r)แต—] - Iโ‚€
CFโ‚œ: After-tax Cash Flow = EBIT(1-T) + Depreciation
r: WACC + Risk Premium
Iโ‚€: CAPEX + Working Capital
IRR: NPV = 0 when r = IRR
Accept: IRR > WACC
PI: = 1 + (NPV รท Iโ‚€)

Decision Criteria

  • NPV > 0: Accept project (creates shareholder value)
  • IRR > WACC: Return exceeds cost of capital
  • PI > 1.0: Value created per dollar invested
  • Payback: Simple โ‰ค 5 yrs, Discounted โ‰ค 7 yrs typical

Industry Benchmarks

  • WACC range: 8-12% (midstream typical)
  • IRR hurdle: 12-15% (corporate minimum)
  • Gas processing IRR: 15-25%
  • Pipeline projects: 20-30 yr economic life
  • MACRS: 15-yr or 7-yr property class

Frequently Asked Questions

What is NPV analysis for gas processing projects?

NPV (Net Present Value) analysis calculates the present value of future cash flows minus the initial investment, helping determine if a gas processing project is financially viable.

What metrics does this NPV calculator provide?

This calculator provides NPV, IRR, MIRR, and sensitivity analysis with depreciation schedules for gas processing project economics.

What is the difference between IRR and MIRR?

IRR assumes reinvestment at the project rate, while MIRR uses a more realistic reinvestment rate, making MIRR generally more reliable for comparing projects.