Overview

When companies make major long-term investments such as property, machinery, or equipment (PP&E) that require a huge upfront investment, they would build a capital investment model in Excel to calculate key valuation metrics on the investment. These metrics could include cash flows, net present value (NPV), internal rate of return (IRR), and payback period.

A capital investment analysis is helpful for comparing multiple investment opportunities and determine which is more profitable. A capital investment model normally consists of the following components:

  • Revenues, expenses, and profits of the investment by months or years
  • The total amount of capital investment and cash flow generated from the investment
  • Net present value (NPV) and internal rate of return (IRR) of the investment to determine its profitability 
  • Payback period, which is the total time it takes for a business to earn back what it invested
Share
Reviews Add a review
No reviews yet

More From Corporate Finance Institute®

Browse our top rated business templates. See All
Energy Industry Comps Template Energy Industry Comps Template
297
19
This energy industry comps template provides a guideline and example of what a comparables universe would look like for a…
Financial Institution Dividend Discount Model
878
20
The financial institution dividend discount model uses future dividends to find the implied share price. This model is based on…
Loan Payment Calculator
553
0
The loan payment calculator allows users to determine the principal and interest payment each month until the full balance of…
DDM - Excel Dividend Discount Model Template
691
56
The dividend discount model template allows investors to value a company base on future dividend payments. This is based on…
Non-directional trading strategy template Non-directional Trading Strategies Template
605
0
The non-directional trading strategies template allow users to determine the profit when buying options. This template focuses on non-directional strategies…
restructuring financial model template preview 1 Restructuring Financial Model Template
874
0
This restructuring financial model template is used to demonstrate the financial interactions behind the restructuring process. Adjust this model to…