How it works
Write the cash list first. Then decide what the page is measuring.
- Write the method on the slide.
- List credits in the year they happen.
- Keep one foot basis.
- Keep one lease-type stack.
- If you discount, show the rate.
Formula in words. Wrong effective rent = sticker math with missing credits or mixed units.
| Input | Meaning |
|---|---|
| Method label | Simple average or discounted |
| Credits | All of them |
| Foot basis | One basis |
| Lease type | Gross or net extras |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
Lease A start rent$33,500
Lease B start rent$31,155
Discount rate8%
Sample NPV A$321,367
| Metric | Lease A | Lease B |
|---|---|---|
| Start rent | $33,500 | $31,155 |
| Year-1 extras | $9,800 | $10,486 |
| Year-1 credit | $6,000 | $3,300 |
| Sample NPV | $321,367 | $311,342 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $33,500 | $9,800 | $6,000 | $37,300 | $34,537 |
| Year 2 | $34,505 | $10,094 | $0 | $44,599 | $38,236 |
| Year 3 | $35,540 | $10,397 | $0 | $45,937 | $36,466 |
| Year 4 | $36,606 | $10,709 | $0 | $47,315 | $34,778 |
| Year 5 | $37,705 | $11,030 | $0 | $48,735 | $33,168 |
| Year 6 | $38,836 | $11,361 | $0 | $50,197 | $31,633 |
| Year 7 | $40,001 | $11,702 | $0 | $51,703 | $30,168 |
| Year 8 | $41,201 | $12,053 | $0 | $53,254 | $28,771 |
| Year 9 | $42,437 | $12,415 | $0 | $54,852 | $27,440 |
| Year 10 | $43,710 | $12,787 | $0 | $56,497 | $26,169 |
| Sample NPV | — | — | — | — | $321,367 |
How to read the sample
Sample NPV for Mistake sample is about $321,367. A second path lands near $311,342. That gap is a talking point, not a promise.
Year notes for Mistake sample
- Year 1 of Mistake sample has rent of $33,500.
- Shared building cost is $9,800.
- A credit of $6,000 lowers the cash you pay that year.
- Cash out this year is about $37,300. A small credit still belongs in year one.
- Later cash gets a shrink for time. At 8 percent, year 1 is worth about $34,537 today.
- Next, year 2 rent is $34,505.
- CAM, which is a shared building cost, is $10,094.
- There is no credit in this year.
- You pay about $44,599 this year after extras and credits. Missing extras would fake a low average.
- Time shrinks later cash. At 8 percent, year 2 is worth about $38,236 today.
- Then year 3 rent is $35,540.
- Extras for the building come to $10,397.
- Credits skip this year.
- The net cash this year is about $45,937. The bump is easy to ignore and wrong to ignore.
- Waiting has a price. At 8 percent, year 3 is worth about $36,466 today.
- After that, year 4 rent is $36,606.
- The shared building cost this time is $10,709.
- No extra credit shows up this year.
- Cash out this year is about $47,315. Later years expose a short-term gift.
- Later cash gets a shrink for time. At 8 percent, year 4 is worth about $34,778 today.
- In year 5 of Mistake sample, rent is $37,705.
- Shared building cost is $11,030.
- There is no credit in this year.
- You pay about $48,735 this year after extras and credits. The last year is where sticker math hides.
- Time shrinks later cash. At 8 percent, year 5 is worth about $33,168 today.
- Year 6 of Mistake sample has rent of $38,836.
- CAM, which is a shared building cost, is $11,361.
- Credits skip this year.
- The net cash this year is about $50,197. Keep this later year in the sum for the sample.
- Waiting has a price. At 8 percent, year 6 is worth about $31,633 today.
- Next, year 7 rent is $40,001.
- Extras for the building come to $11,702.
- No extra credit shows up this year.
- Cash out this year is about $51,703. The row still belongs in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 7 is worth about $30,168 today.
- Then year 8 rent is $41,201.
- The shared building cost this time is $12,053.
- There is no credit in this year.
- You pay about $53,254 this year after extras and credits. Keep this later year in the sum for the long path.
- Time shrinks later cash. At 8 percent, year 8 is worth about $28,771 today.
- After that, year 9 rent is $42,437.
- Shared building cost is $12,415.
- Credits skip this year.
- The net cash this year is about $54,852. The row still belongs in the sum for the long path.
- Waiting has a price. At 8 percent, year 9 is worth about $27,440 today.
- In year 10 of Mistake sample, rent is $43,710.
- CAM, which is a shared building cost, is $12,787.
- No extra credit shows up this year.
- Cash out this year is about $56,497. Keep this later year in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 10 is worth about $26,169 today.
Add those year values. The sample NPV for Mistake sample is about $321,367. This is a teaching sample, not a client result.
Trusted sources
These are public references. They are not endorsements and not client results.