This is a simplified example of how net present value calculations work but it’s meant to illustrate what the formula can tell you about an investment. What if you get $0 when calculating NPV?

Learn how Equivalent Annual Cost (EAC) helps compare asset costs over time. Understand this crucial capital budgeting tool to make informed financial decisions.

A time period for the investment must also be determined. Use a time value of money table or the NPV formula available in most spreadsheet programs to calculate an IT project's NPV.

An annuity table is a tool for determining the present value of an annuity or other structured series of payments.