How it works
The cash flow is the list of money in and out by year. Write that list first.
- Review extras, credit timing, the rate, the term window, and the leftovers.
- If any check fails, do not publish the rank.
- Write the fail in the open.
- Then fix the row and rerun.
Formula in words. No rank until extras, credits, rate, window, and leftovers are visible.
| Input | Meaning |
|---|---|
| Extras present | Yes or no |
| Credit year | Matches the deal |
| Shared rate | Yes or no |
| Shared window | Yes or no |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
| Metric | Lease A | Lease B |
|---|---|---|
| Start rent | $42,000 | $39,060 |
| Year-1 extras | $10,200 | $10,914 |
| Year-1 credit | $13,000 | $7,150 |
| Sample NPV | $387,344 | $375,585 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $42,000 | $10,200 | $13,000 | $39,200 | $36,296 |
| Year 2 | $43,512 | $10,506 | $0 | $54,018 | $46,312 |
| Year 3 | $45,078 | $10,821 | $0 | $55,899 | $44,374 |
| Year 4 | $46,701 | $11,146 | $0 | $57,847 | $42,519 |
| Year 5 | $48,383 | $11,480 | $0 | $59,863 | $40,742 |
| Year 6 | $49,834 | $11,824 | $0 | $61,658 | $38,855 |
| Year 7 | $51,329 | $12,179 | $0 | $63,508 | $37,056 |
| Year 8 | $52,869 | $12,544 | $0 | $65,413 | $35,341 |
| Year 9 | $54,455 | $12,920 | $0 | $67,375 | $33,704 |
| Year 10 | $56,089 | $13,308 | $0 | $69,397 | $32,144 |
| Sample NPV | — | — | — | — | $387,344 |
How to read the sample
Sample NPV for the mistake-check lease is about $387,344. A second path lands near $375,585. That gap is a talking point, not a promise.
A wrong credit year would distort this row. If one path wins only because a credit sat in the wrong year, start over.
Year notes for the mistake-check lease
- Year 1 of the mistake-check lease has rent of $42,000.
- Shared building cost is $10,200.
- A credit of $13,000 lowers the cash you pay that year.
- Cash out this year is about $39,200. A wrong credit year would distort this row.
- Later cash gets a shrink for time. At 8 percent, year 1 is worth about $36,296 today.
- Next, year 2 rent is $43,512.
- CAM, which is a shared building cost, is $10,506.
- There is no credit in this year.
- You pay about $54,018 this year after extras and credits. A missing extra would understate this row.
- Time shrinks later cash. At 8 percent, year 2 is worth about $46,312 today.
- Then year 3 rent is $45,078.
- Extras for the building come to $10,821.
- Credits skip this year.
- The net cash this year is about $55,899. A private rate change would shrink this row only.
- Waiting has a price. At 8 percent, year 3 is worth about $44,374 today.
- After that, year 4 rent is $46,701.
- The shared building cost this time is $11,146.
- No extra credit shows up this year.
- Cash out this year is about $57,847. A mixed term would add ghost years after this.
- Later cash gets a shrink for time. At 8 percent, year 4 is worth about $42,519 today.
- In year 5 of the mistake-check lease, rent is $48,383.
- Shared building cost is $11,480.
- There is no credit in this year.
- You pay about $59,863 this year after extras and credits. A leftover left unsaid would sit here in silence.
- Time shrinks later cash. At 8 percent, year 5 is worth about $40,742 today.
- Year 6 of the mistake-check lease has rent of $49,834.
- CAM, which is a shared building cost, is $11,824.
- Credits skip this year.
- The net cash this year is about $61,658. Keep this later year in the sum for the sample.
- Waiting has a price. At 8 percent, year 6 is worth about $38,855 today.
- Next, year 7 rent is $51,329.
- Extras for the building come to $12,179.
- No extra credit shows up this year.
- Cash out this year is about $63,508. 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 $37,056 today.
- Then year 8 rent is $52,869.
- The shared building cost this time is $12,544.
- There is no credit in this year.
- You pay about $65,413 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 $35,341 today.
- After that, year 9 rent is $54,455.
- Shared building cost is $12,920.
- Credits skip this year.
- The net cash this year is about $67,375. The row still belongs in the sum for the long path.
- Waiting has a price. At 8 percent, year 9 is worth about $33,704 today.
- In year 10 of the mistake-check lease, rent is $56,089.
- CAM, which is a shared building cost, is $13,308.
- No extra credit shows up this year.
- Cash out this year is about $69,397. 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 $32,144 today.
Add those year values. The sample NPV for the mistake-check lease is about $387,344. This is a teaching sample, not a client result.
Trusted sources
These are public references. They are not endorsements and not client results.
How to use this with OccupancyNPV
This page answers the concept. OccupancyNPV applies it inside a DealWorkspace: enter lease scenarios, review cash-flow and occupancy cost, then compare NPV and discount-rate sensitivity. OccupancyNPV NPV is not the same as a face-rent comparison. OccupancyNPV is not a CRM or lease-administration suite, and this page is not legal or investment advice.
Next: start the 3-day free trial, open pricing, or continue through related product paths.