How it works
Write the cash list first. Then decide what the page is measuring.
- Build the input sheet first.
- Write one row per period.
- Link every money cell to an input.
- Add a check that beginning plus activity equals the next beginning.
- Discount the stream. Then test a nearby rate and a nearby extra.
Formula in words. Period cash = rent + extras − credits. NPV = sum of shrunk period cash.
| Input | Meaning |
|---|---|
| Input sheet | Dates, steps, extras, rate |
| Period rows | One row per year or month |
| Checks | Ties and sign checks |
| Outputs | NPV, effective rent, occupancy cost |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
Lease A start rent$36,000
Lease B start rent$33,480
Discount rate8%
Sample NPV A$325,281
| Metric | Lease A | Lease B |
|---|---|---|
| Start rent | $36,000 | $33,480 |
| Year-1 extras | $8,800 | $9,416 |
| Year-1 credit | $14,000 | $7,700 |
| Sample NPV | $325,281 | $316,739 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $36,000 | $8,800 | $14,000 | $30,800 | $28,519 |
| Year 2 | $37,080 | $9,064 | $0 | $46,144 | $39,561 |
| Year 3 | $38,192 | $9,336 | $0 | $47,528 | $37,729 |
| Year 4 | $39,338 | $9,616 | $0 | $48,954 | $35,983 |
| Year 5 | $40,518 | $9,904 | $0 | $50,422 | $34,316 |
| Year 6 | $41,734 | $10,201 | $0 | $51,935 | $32,728 |
| Year 7 | $42,986 | $10,507 | $0 | $53,493 | $31,213 |
| Year 8 | $44,276 | $10,822 | $0 | $55,098 | $29,768 |
| Year 9 | $45,604 | $11,147 | $0 | $56,751 | $28,390 |
| Year 10 | $46,972 | $11,481 | $0 | $58,453 | $27,075 |
| Sample NPV | — | — | — | — | $325,281 |
How to read the sample
Sample NPV for Cash-flow-build sample is about $325,281. A second path lands near $316,739. That gap is a talking point, not a promise.
Year notes for Cash-flow-build sample
- Year 1 of Cash-flow-build sample has rent of $36,000.
- Shared building cost is $8,800.
- A credit of $14,000 lowers the cash you pay that year.
- Cash out this year is about $30,800. Period one holds the credit.
- Later cash gets a shrink for time. At 8 percent, year 1 is worth about $28,519 today.
- Next, year 2 rent is $37,080.
- CAM, which is a shared building cost, is $9,064.
- There is no credit in this year.
- You pay about $46,144 this year after extras and credits. Period two is a clean formula row.
- Time shrinks later cash. At 8 percent, year 2 is worth about $39,561 today.
- Then year 3 rent is $38,192.
- Extras for the building come to $9,336.
- Credits skip this year.
- The net cash this year is about $47,528. The bump should flow from an input.
- Waiting has a price. At 8 percent, year 3 is worth about $37,729 today.
- After that, year 4 rent is $39,338.
- The shared building cost this time is $9,616.
- No extra credit shows up this year.
- Cash out this year is about $48,954. Later rows must not be pasted values.
- Later cash gets a shrink for time. At 8 percent, year 4 is worth about $35,983 today.
- In year 5 of Cash-flow-build sample, rent is $40,518.
- Shared building cost is $9,904.
- There is no credit in this year.
- You pay about $50,422 this year after extras and credits. The last row proves the term length.
- Time shrinks later cash. At 8 percent, year 5 is worth about $34,316 today.
- Year 6 of Cash-flow-build sample has rent of $41,734.
- CAM, which is a shared building cost, is $10,201.
- Credits skip this year.
- The net cash this year is about $51,935. Keep this later year in the sum for the sample.
- Waiting has a price. At 8 percent, year 6 is worth about $32,728 today.
- Next, year 7 rent is $42,986.
- Extras for the building come to $10,507.
- No extra credit shows up this year.
- Cash out this year is about $53,493. 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 $31,213 today.
- Then year 8 rent is $44,276.
- The shared building cost this time is $10,822.
- There is no credit in this year.
- You pay about $55,098 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 $29,768 today.
- After that, year 9 rent is $45,604.
- Shared building cost is $11,147.
- Credits skip this year.
- The net cash this year is about $56,751. The row still belongs in the sum for the long path.
- Waiting has a price. At 8 percent, year 9 is worth about $28,390 today.
- In year 10 of Cash-flow-build sample, rent is $46,972.
- CAM, which is a shared building cost, is $11,481.
- No extra credit shows up this year.
- Cash out this year is about $58,453. 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 $27,075 today.
Add those year values. The sample NPV for Cash-flow-build sample is about $325,281. This is a teaching sample, not a client result.
Trusted sources
These are public references. They are not endorsements and not client results.