šŸ’°

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 = Ī£[CFā‚œ/(1+r)įµ—] - Iā‚€
CFā‚œ: After-tax Cash Flow = EBIT(1-T) + Depreciation
r: WACC + Risk Premium
Iā‚€: CAPEX + Working Capital
IRR: NPV = 0 when r = IRR
Accept: IRR > WACC
PI: = 1 + (NPV Ć· Iā‚€)

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 ≤ 5 yrs, Discounted ≤ 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