By intervening early, SBIRT saves lives and money and is consistent with overall support for patient wellness. Late-stage intervention and substance abuse treatment is expensive, and the patient has often developed comorbid health conditions.
Example 1: Even Cash Inflows: Calculate the net present value of a project which requires an initial investment of $243,000 and it is expected to generate a cash inflow of $50,000 each month for 12 months. Assume that the salvage value of the project is zero. The target rate of return is 12% per annum. Solution.
Then, each of these present values are added up and netted against the initial investment of $100,000 in order to find the net present value. This is exactly how NPV is calculated, step by step. Letâs take another example of calculating NPV using the same set of cash flows, except with a different discount rate. In this second example the same exact process is followed in order to calculate the net present value. However, this time we are using a 12% discount rate instead of an 8% discount rate. As shown above, each future cash flow is discounted back to the present time at a 12% discount rate.