Toolopedia

Net Present Value (NPV) Ladder

A dynamic financial modeling tool that allows for rapid sensitivity analysis by calculating Net Present Value (NPV) across a range of different discount rates. Users input the initial investment and a series of projected cash flows for subsequent periods. They then define a 'ladder' of discount rates (e.g., from 5% to 15% in 1% increments). The tool instantly calculates and displays the NPV for each rate, showing how the project's profitability changes with varying costs of capital. This is invaluable for capital budgeting, investment analysis, and understanding a project's sensitivity to interest rate risk.

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