Net Present Value Calculator

Developed in conjunction with one of our long serving clients, ‘Town and Country Housing Association’, IHS Integrator includes an add-on module to calculate Net Present Value, also known as Present Discounted Value.

In economics, NPV is a future amount money that has been discounted to reflect its current value, as if it existed today.

So for any given property, Net Present Value is a measure of the value of a property based on its future anticipated cash inflows and outflows. “Net” is used as it is the net of income and expenditure.

Key Features

Net present value is a time series of cash flows, both in and out, and is defined as the sum of the present values of an income generating unit.

NPV is a central tool in Discounted Cash Flow (DCF) analysis and is a standard method for using the time value of money to appraise long-term projects

A key assumption is a discount rate which T&C have adopted as 7.1125% nominal. This discount rate consists of a 4.5% real rate and 2.5% inflation.

This screen shot is taken from Integrator incorporating the NPV Spreadsheet which was tailor-made to suit requirements.

The approach that Integrator takes is to provide links between data contained in the Integrator database and the user’s own NPV calculation model contained in an Excel workbook.

Key Benefits

Users can customise this to suit their own particular needs, and include their own preferred assumptions (IHS will provide a template workbook as a starting point).

All the necessary property-level input data required for the NPV calculations can be stored in Integrator and fed through to the workbook to calculate NPVs for all properties in a single batch operation.

Integrator automatically receives the NPV results from the workbook and stores them in the database. They are then available to Integrator filters and reports along with all other Integrator data and calculated results, and can be incorporated into the User Defined Standards and Sustainability modules.

The NPV module is therefore a powerful tool for providing sophisticated net asset valuations, for facilitating options appraisals and for informing decisions relating to asset retention or disposal