Investment Appraisal Template

Most capital decisions are made on one number — usually payback, sometimes a gut feeling. The trouble is that a project can pay back quickly and still destroy value, or look marginal at one discount rate and comfortable at another. A proper appraisal builds the cash flow year by year, discounts it at the right rate, and then asks what happens when the assumptions turn out wrong.

This template does all three from a single Inputs sheet. Enter the investment, units, price, variable and fixed costs, growth rates, working capital, tax, useful life and the end-of-life sale value. The Cash Flow sheet builds revenue down to free cash flow for up to fifteen years, and the Dashboard reports every standard appraisal measure with a plain-English decision checklist.

Then it stress-tests the answer. Scenarios runs the full model three times — Base, Best and Worst — and Sensitivity moves each driver on its own to show, in a tornado chart, which assumption moves NPV most. An NPV grid by discount rate and volume shows how much headroom the project really has. Every figure is a live formula: there are no data tables and no macros, so everything recalculates the moment you change an input.

What you get

• Year-by-year free cash flow: revenue, EBITDA, depreciation, tax, working capital, capital spending and after-tax sale value
• NPV, IRR, MIRR, profitability index, payback, discounted payback, equivalent annual annuity and accounting rate of return
• Decision checklist: NPV, IRR, MIRR, PI and payback tested against your discount rate and target
• Base, Best and Worst scenarios run side by side
• One-at-a-time sensitivity with a tornado chart, and an NPV grid by discount rate and volume
• Optional WACC sheet: CAPM cost of equity, after-tax cost of debt and weights
• Free cash flow, cumulative cash and NPV-profile charts
• Thirteen automatic checks, including agreement with Excel’s NPV, IRR and MIRR functions
• Up to 15 years, additional capital spending in any year, configurable currency label
• Sheets protected without a password; no macros, no add-ins, no internet connection required

Who it is for

Finance managers and business owners deciding on equipment, a new production line, a site or an expansion; analysts preparing a capital request for a board or a lender; students and lecturers who want a transparent, fully worked capital budgeting model.

In the download

• Excel workbook with 9 sheets, fully formula-driven
• README with the full usage guide
• Licence covering commercial and client use
• Worked sample data throughout, clearly labelled

Sheets in the workbook

• Instructions — How to use the file, colour key, assumptions and limitations.
• Dashboard — Headline results, decision checklist and charts.
• Inputs — Every assumption. The main sheet you edit.
• WACC — Optional cost-of-capital build-up.
• Cash Flow — Revenue to free cash flow, discounting, cumulative cash and payback.
• Scenarios — Base, Best and Worst cases side by side.
• Sensitivity — Tornado analysis and an NPV grid.
• Guide — Definitions, formulas and modelling notes.
• Checks — Automatic self-checks.

Requirements

• Microsoft Excel 2016 or later, or Microsoft 365
• Also opens in LibreOffice Calc, Google Sheets (import) and Apple Numbers
• No macros, no add-ins, no internet connection required

Please read

• A decision-support tool, not financial, tax, accounting or investment advice.
• Single-project model. For several product lines, use weighted averages or run the template once per line.
• No country’s tax rules or capital allowances are built in. Tax losses are assumed to be usable against other profits.
• Financing (interest and loan repayments) is reflected in the discount rate, not in the cash flows.
• Sample data is included and clearly labelled. It is illustrative only.

Try the free calculators first

NPV Calculator · IRR Calculator · Payback Period Calculator · ROI Calculator

Works well with

Financial Model Template — for the whole business rather than a single project · Break-Even Analysis Template

Also available together with the Financial Model Template in the Financial Modelling & Investment bundle.