27 28 Break-even Analysis 29 Yearly NPV Cash Flow 30 Overall NPV Cash Flow 31 32 $0 $0 $0 $0 $0 $0 33 Use the first year of positive cash flow to calculate break-even fraction. 34 Actual break-even occurs at Post Step 3 here! 35 36 37 30 39 40 41 Calculating the Break Even Point 1. Find the last year row 30 is negative; go up the column to the year listed in row 6. Write down that result as the whole year. Then do Steps 2 and 3 below to calculate fraction to add to the whole year value. $0 $0 $0 $0 $0 $0 0 2. First year row 30 is positive, take row 29, and subract row 30 in same column, and then divide the result by the row 29 value/row 29. BEP 3. ADD Step 1 (full year value) with Step 2 (fractional year value) = 5 6 7 Net Economic Benefit $0 8 9 PV of Benefits 10 0 1 $0 1.00000 $0 $0 $0 $0 1 1 1 1 $0 $0 $0 $0 $0 $0 YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL 5 S Must be given: 1. Net economic benefit from tangible benefit worksheet goes in row 7 cell C7. 2. Discount rate: Row 8 Cell A8 as a fraction; i.e., 12% would be entered as .12 3. One time cost, which will be placed in row 13, cell B13; make sure to enter the cost as a negative. 4. Recurring costs place in row 15-cell C15, and make sure to enter the cost as a negative. 11 NPV of all Benefits $0 $0 $0 $0 $0 $0 $0 12 13 One-Time Costs $0 14 15 Recurring Costs $0 $0 $0 $0 $0 $0 16 Discount Rate 1 1 1 1 1 17 PV of Recurring Costs $0 $0 $0 $0 $0 $0 18 19 NPV of all Costs $0 $0 $0 $0 $0 $0 $0 20 21 22 Overall NPV 222222 23 24 25 Overall ROI 26 #DIV/0! $0