CAPEX ROI Analyzer

What this tool does

CM8-05 evaluates a capital equipment purchase the way a finance reviewer would: it builds a year-by-year cash-flow schedule from your one-off investment and annual benefits, then reports simple payback, NPV, IRR, discounted payback and ROI, with a ±20% sensitivity view and up to three scenarios side by side (e.g. Machine A vs Machine B vs “do nothing differently”).

Everything runs inside this single HTML file. No installation, no account, no network requests — your figures never leave your computer.

The cash-flow model

The convention used throughout:

• Year 0: you pay the full investment — equipment + installation & training + other one-off costs. This is a negative cash flow.
• Years 1…N: at each year end you receive the year's total benefit — the sum of the six benefit categories for that year (maintenance delta may be negative).
• Year N (final year): additionally receives the salvage value — what you expect to sell the asset for at end of life.

The per-year benefits table is fully editable. The quick path: enter Year-1 values for each category, set an annual growth rate, and press “Fill benefits table” — each category is grown as Year n = Year 1 × (1+g)ⁿ⁻¹. Then hand-edit any cell (a ramp-up year at 50%, a mid-life overhaul as a negative maintenance delta, etc.).

NPV, IRR & payback — in plain language

Simple payback

How long until cumulative cash flow climbs back to zero. Fast to grasp, and the number most managers ask for first — but it ignores everything that happens after payback and ignores the time value of money. Shown in years and months, interpolated within the crossing year.

NPV — net present value

Money later is worth less than money now, because capital tied up here can't earn elsewhere. NPV discounts every future cash flow back to today at your discount rate (hurdle rate / cost of capital) and adds them up:

NPV > 0 means the investment beats your hurdle rate — it creates value even after paying for the capital it uses. NPV < 0 means the money would earn more elsewhere. NPV is the single best decision number in this tool.

IRR — internal rate of return

The discount rate at which NPV would be exactly zero — the investment's own effective “interest rate”. If IRR is well above your hurdle rate, the project has margin for error. The tool solves it numerically (bracket scan + bisection, robust to awkward flow patterns); when the cash flows never change sign or no root exists in a sensible range it reports n/a rather than a misleading number.

Discounted payback

Same idea as simple payback, but on the discounted cash flows — how long until the investment has repaid itself in today's money. Always longer than simple payback.

ROI over life

Total net gain divided by the investment: ROI = (Σ benefits + salvage − investment) ⁄ investment. An undiscounted, whole-life figure — intuitive, but use NPV/IRR for the actual decision.

Choosing sensible inputs

• Equipment cost: quoted machine price including options, tooling packages and freight.
• Installation & training: rigging, foundations, utilities hookup, commissioning, first-year operator and maintenance training.
• Other one-off: spare-parts stock, software licences, fixtures, process qualification runs, disposal of the old asset.
• Labour savings: hours saved × fully-burdened rate (wage + benefits + overheads), not bare wage.
• Material / scrap savings: yield improvement × material cost, reduced rework and warranty cost.
• Maintenance delta: old asset's maintenance cost minus the new asset's. A new machine replacing a tired one is usually positive; adding capacity is usually negative (more to maintain).
• Added revenue / contribution: use contribution margin (price − variable cost), not gross revenue — and only volume you can genuinely sell.
• Discount rate: many manufacturers use 8–15% pre-tax. If your company has a published hurdle rate, use it.
• Useful life: the shorter of technical life, technology-obsolescence horizon, and the product program the asset serves. 5–10 years is typical for machine tools.

Reading the sensitivity tornado

Each bar shows the NPV range when one driver moves ±20% while the others stay put: the total investment, the annual benefits (all years scaled together), and the discount rate. The solid marker is your base NPV; the dashed red line is NPV = 0.

• The longest bar is the driver your decision is most exposed to — usually the benefit estimate. Firm that number up first.
• If a bar crosses the zero line, a realistic estimating error can flip the decision — treat the case as marginal and investigate before committing.
• If all bars stay well right of zero, the decision is robust.

Comparing scenarios

Use + Add or Duplicate in the scenario bar to model up to three options — different machines, new vs refurbished, buy now vs wait. The Compare tab shows the key metrics side by side and highlights the best NPV. When lives differ significantly, note that plain NPV favours longer horizons; keep horizons comparable where you can.

Saving your work

• Autosave: every scenario and the report header are kept in this browser's local storage automatically (see the “Autosaved HH:MM” stamp in the toolbar) and restored next time you open the file.
• Save: writes to this browser immediately and flashes “Saved ✓ HH:MM”. Use it before closing the tab if you want to be certain.
• Export .json: downloads every scenario with all inputs, the full per-year benefits table and the report header — attach it to your capital-request file or share it with a colleague. Import .json loads it back.
• Export CSV: the cash-flow schedule plus headline metrics, ready for a spreadsheet or the finance pack.
• Print Report: rebuilds and prints the investment memo — executive tiles (NPV, IRR, simple and discounted payback, ROI), verdict, assumptions, all three charts, the cash-flow schedule, the scenario comparison and your closing notes. Browser print dialog → save as PDF works too.
• Report details: the title, company/site, “prepared by” and closing notes on the Analyzer tab appear on the printed memo and are saved with your project.

Limits & assumptions

• Pre-tax; no depreciation, tax shields or financing structure (lease vs buy) modelled.
• End-of-year cash-flow convention; the whole investment is assumed paid at Year 0.
• Benefits are in nominal money — if you include inflation in the growth rate, use a nominal discount rate; if you work in real (today's) money, use a real discount rate. Don't mix.
• Currency is a label for display and export; changing it converts nothing.
• IRR can be undefined or non-unique for unconventional flow patterns; the tool reports the first root in (−99%, +1000%) or n/a.