Tutorials : Analyzing investment using Focal Point® : Module 3: Analyze the financial model results : Lesson 2: Analyze the output attributes
  
Lesson 2: Analyze the output attributes
In this lesson, you analyze the output attributes that represent the financial metrics of the project.
1 Click Modules > Mobile App.
2 Click the Mobile Application element.
3 Observe the values of these output attributes:
NPV Mean: A Net Present Value Mean that is greater than zero indicates that the investment adds value to the project. A value that is less than zero indicates that the investment does not add any value to the project. A value equal to zero indicates that the project does not gain or lose from the investment.
ROI: A high Return on Investment (ROI) indicates that investment gains compare favorably to investment costs. The ROI is used as an indicator to check whether the organization received return for the money invested to date, and whether it is likely to earn returns for the money invested today and in the future.
Payback Period: The payback period indicates the time when the project will recover its initial investment cost and be profitable thereon. A payback period value of zero indicates that the projected benefits at the start of the project exceed costs, corresponding to the first time period. If costs reduce over time and benefits continue to accrue, the payback period is the period at which the accrued benefits equals or exceeds the accrued costs. If the accrued benefits never equal or exceed the accrued costs, then the payback period is -1, indicating that a payback condition is never met.
IRR: The Internal Rate of Return is a rate quantity and is an indicator of the efficiency, quality, or yield of an investment. The investment with a higher IRR is the better choice.
Financial model result
Note The values might vary depending on the values of your estimates.
Lesson checkpoint
In this lesson, you learned to analyze and interpret the output attributes. The output attributes indicates the financial metrics of the project and help in arriving at crucial business decisions.
For more information, see Financial model results and Financial model parameters.
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Summary: Analyze investment using Focal Point®
See also
Module 3: Analyze the financial model results