How it works
Write the cash list first. Then decide what the page is measuring.
- Lock a base case.
- Move one input.
- Record whether the rank holds.
- Repeat for the two or three inputs that actually matter.
Formula in words. If a small move flips the winner, the base case was fragile.
| Input | Meaning |
|---|---|
| Base case | The shared stack |
| Test input | Rate, extra, term, or credit |
| Range | A nearby high and low |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
Lease A start rent$40,500
Lease B start rent$37,665
Discount rate8%
Sample NPV A$356,818
| Metric | Lease A | Lease B |
|---|---|---|
| Start rent | $40,500 | $37,665 |
| Year-1 extras | $8,600 | $9,202 |
| Year-1 credit | $15,000 | $8,250 |
| Sample NPV | $356,818 | $346,209 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $40,500 | $8,600 | $15,000 | $34,100 | $31,574 |
| Year 2 | $41,715 | $8,858 | $0 | $50,573 | $43,358 |
| Year 3 | $42,966 | $9,124 | $0 | $52,090 | $41,351 |
| Year 4 | $44,255 | $9,397 | $0 | $53,652 | $39,436 |
| Year 5 | $45,583 | $9,679 | $0 | $55,262 | $37,610 |
| Year 6 | $46,950 | $9,969 | $0 | $56,919 | $35,869 |
| Year 7 | $48,359 | $10,268 | $0 | $58,627 | $34,208 |
| Year 8 | $49,810 | $10,576 | $0 | $60,386 | $32,625 |
| Year 9 | $51,304 | $10,893 | $0 | $62,197 | $31,114 |
| Year 10 | $52,843 | $11,220 | $0 | $64,063 | $29,674 |
| Sample NPV | — | — | — | — | $356,818 |
How to read the sample
Sample NPV for Why-sensitivity sample is about $356,818. A second path lands near $346,209. That gap is a talking point, not a promise.
Year notes for Why-sensitivity sample
- Year 1 of Why-sensitivity sample has rent of $40,500.
- Shared building cost is $8,600.
- A credit of $15,000 lowers the cash you pay that year.
- Cash out this year is about $34,100. The base case looks calm in year one.
- Later cash gets a shrink for time. At 8 percent, year 1 is worth about $31,574 today.
- Next, year 2 rent is $41,715.
- CAM, which is a shared building cost, is $8,858.
- There is no credit in this year.
- You pay about $50,573 this year after extras and credits. A rate move would shrink later years more.
- Time shrinks later cash. At 8 percent, year 2 is worth about $43,358 today.
- Then year 3 rent is $42,966.
- Extras for the building come to $9,124.
- Credits skip this year.
- The net cash this year is about $52,090. A CAM move would lift every year.
- Waiting has a price. At 8 percent, year 3 is worth about $41,351 today.
- After that, year 4 rent is $44,255.
- The shared building cost this time is $9,397.
- No extra credit shows up this year.
- Cash out this year is about $53,652. Later cash is where rate tests bite.
- Later cash gets a shrink for time. At 8 percent, year 4 is worth about $39,436 today.
- In year 5 of Why-sensitivity sample, rent is $45,583.
- Shared building cost is $9,679.
- There is no credit in this year.
- You pay about $55,262 this year after extras and credits. The last year is the most shrunk.
- Time shrinks later cash. At 8 percent, year 5 is worth about $37,610 today.
- Year 6 of Why-sensitivity sample has rent of $46,950.
- CAM, which is a shared building cost, is $9,969.
- Credits skip this year.
- The net cash this year is about $56,919. Keep this later year in the sum for the sample.
- Waiting has a price. At 8 percent, year 6 is worth about $35,869 today.
- Next, year 7 rent is $48,359.
- Extras for the building come to $10,268.
- No extra credit shows up this year.
- Cash out this year is about $58,627. 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 $34,208 today.
- Then year 8 rent is $49,810.
- The shared building cost this time is $10,576.
- There is no credit in this year.
- You pay about $60,386 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 $32,625 today.
- After that, year 9 rent is $51,304.
- Shared building cost is $10,893.
- Credits skip this year.
- The net cash this year is about $62,197. The row still belongs in the sum for the long path.
- Waiting has a price. At 8 percent, year 9 is worth about $31,114 today.
- In year 10 of Why-sensitivity sample, rent is $52,843.
- CAM, which is a shared building cost, is $11,220.
- No extra credit shows up this year.
- Cash out this year is about $64,063. 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 $29,674 today.
Add those year values. The sample NPV for Why-sensitivity sample is about $356,818. This is a teaching sample, not a client result.
Trusted sources
These are public references. They are not endorsements and not client results.