Strategic Planning Framework

Strategic Planning Models

Metrics and Selection Critera

Net Present Value (NPV) =   å_T+1...N A/(1+r)^t   Where t equals the year of the cash flow, A is the amount of the cash flow each year and r is the discount rate.

The net present value of an investment is today's value of a series of future payments and income -- see examples:

Return On Investment = Income/investment

DISCOUNT FACTOR (DF)= DF= 1/(1+r)^t  where r is the discount rate and t is the year

DF is the multiplier for each year based on on the discount rate for that year.

Fig. 1 Strategic Planning