Net Present Value
Yes, Maros software for RAM analysis will calculate the Net Present Value.
The Net Present Value allows comparisons to be made between different projects by using all the cash flows from the project and adjusting them to their present values by applying the appropriate discount factor. The projects then become directly comparable. Should the present value of the capital inflows exceed those of the outflows after the selected discount rate has been applied, the project is showing a positive cash flow return and the greater the value the better. However, if the NPV is negative the returns from the project are less than the outflows and attempts should be made to minimize the NPV. The NPV graph produced displays various factors (depending on the type of NPV chosen) for each time interval of the system life.
Information taken into account:
- Annual discount rate
- Capital expenditure
- Operating expenditure
- Product price
- Contract loss data