Contributor

NPV without an outflow

Good morning

I am building a model consisting of future variable monthly cash outflows without any cash inflows.

I need to calculate the NPV of that in order to convert that into a liability using the variable cash outflows as down payments..

The NPV formula require cash in and cash out.

2 ACCEPTED SOLUTIONS

Accepted Solutions
Community Boss

Re: NPV without an outflow

It is possible to calculate the NPV as per your table.

NPV can work with with data whose source is either dimensioned by time period or a transactions list.

I will outline both approaches;

With Time

Cashflows are laid out using time dimension.

Without Time

Time dimension has been removed and a transaction list added.

This is the result;

The difference in values is due to the time calculation taking the full model calander and discounting over the full 3 years. The no time calculation only calculates for the values and dates presented and will stop discounting after the final transaction.

Chris
HeathcoteAndHerran.com
Moderator

Re: NPV without an outflow

In Our April Group Event we discussed how NPV can be calculated without Anaplan timescale. Here is the link.

https://community.anaplan.com/t5/Modelers-Forum-India/Recording-of-Group-Event-13-04-2021/m-p/105085

Hope this helps

Misbah

8 REPLIES 8
Certified Master Anaplanner

Re: NPV without an outflow

Hi @Roelofg

I would suggest that you come up with a mock up in excel, and share the screen shot here.

Thanks,

LipChean

Contributor

See below

Contributor

Re: NPV without an outflow

 5% Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Monthly 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Variable 500 500 End of Contract 2000 1000 1000 1000 1000 1000 1500 1000 1000 1000 1000 1000 1500 1000 3000 NPV \$16,422.30
Certified Master Anaplanner

Re: NPV without an outflow

Hi @Roelofg

Have you given the NPV formula a try?

https://help.anaplan.com/c504a4f5-5513-42e3-91cf-b34d873d18f3-NPV

Thanks,

LipChean

Contributor

Re: NPV without an outflow

I used it but is concerned about the following statement:

NPV(d, c, [m, t]) where

• c: Number: Cash flow. Must have at least one negative and one positive value

The cashflow does not have at least one negative. Does this have an impact on the answer?

Roelof

Certified Master Anaplanner

Re: NPV without an outflow

Hi @Roelofg

Looking back at your example, how did you arrive at 16,422.3

When i tried to do a mockup in Excel, i arrived at 11,560.3

Please note that i moved 2000 to Feb21 to be added with the 1000 from Feb21.

Thanks,

LipChean

Community Boss

Re: NPV without an outflow

It is possible to calculate the NPV as per your table.

NPV can work with with data whose source is either dimensioned by time period or a transactions list.

I will outline both approaches;

With Time

Cashflows are laid out using time dimension.

Without Time

Time dimension has been removed and a transaction list added.

This is the result;

The difference in values is due to the time calculation taking the full model calander and discounting over the full 3 years. The no time calculation only calculates for the values and dates presented and will stop discounting after the final transaction.

Chris
HeathcoteAndHerran.com
Moderator

Re: NPV without an outflow

In Our April Group Event we discussed how NPV can be calculated without Anaplan timescale. Here is the link.

https://community.anaplan.com/t5/Modelers-Forum-India/Recording-of-Group-Event-13-04-2021/m-p/105085

Hope this helps

Misbah