Can any one help to get the Formula/Process on How to calculate Net Present Value(NPV) in Clarity(V13.3) Projects
Attached is the calculation I could get
Planned NPV = Planned Benefit - Planned Cost
You can use the above formula in the process to calculate the NPV
Also, check this -
Cost Of Capital Parameter and NPV
Document ID: TEC508095Last Modified Date: 2/18/2013ShowHide Technical Document Details
Description:Clarity NPV CalculationIn Clarity, the Net Prevent Value (NPV) is the difference between the sum of the Present Value of Revenue and the sum of the Present Value of Costs.In Clarity, the Return On Investment (ROI) is the ratio between the Net Present Value and the sum of the Present Value of Costs.Solution:Calculations within Clarity for these values are accomplished as follows:
We have recently written custom database functions to calculate NPV, IRR and Payback period values annually and used thse functions in processes so that process with trigger on cost / benefit plan update.
The following is the formula for calculating NPV:
Where Ct is cash flows at each period (in my case t is in years)
r = discounted rate
t = time period (years)
Fetch the total_forecast and total_benefit amounts for your project from the below tables (total_forecast union total_benefit).
inv_investments i, fin_plans fp, fin_cost_plan_details fpd, odf_ssl_cst_dtl_cost fcst
Once you fetch cost and benefit, your select statement looks something like this.
ROW_NUMBER() OVER (PARTITION BY y.project_id ORDER BY y.plan_year ASC) rn,
(SUM(q.benefit) - SUM(q.cost)) net_cost
param_d_rate is noting but our r (discounted rate).
rn is number of years. ex: if your cost plan starts at 2014 and ends at 2016 and benefit plan starts at 2015 and ends at 2017 then rn is:
Hoping the provided information will help.
Thanks for your Response NJ and Manas.
The requirement is , Customer has asked us the Logic behind the NPV Calculation, We have same Formula which NJ has Posted above. But with that we could get unmatched values.
The attachmnet contains all the Financial details of a test Project, could you please help me to calculates.
Many Thanks for your quick help
FYI the Cost of Capital % is set as 5% in system.
Don't forget to include your 'Initial Investment' amount. this is a new attribute introduced in v13 that is included in the computations.
Thanks for chipping in, Kathryn
Do we need to add the Initial Investment to the Total Cost ?
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