Financial calculations on demand

Geeky
Kilo Guru

Can anybody please explain how financials are calculated on a demand?

How to allocate certain amount to the demand

How ROI% is calculated?

How net present value is calculated etc? Please explain these calculations with example.

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1 ACCEPTED SOLUTION

Sandeep V1
ServiceNow Employee
ServiceNow Employee

Hi Srini,

I took even distribution for cost plans in my earlier calculations, that is why it is slightly off from the system NPV. But now that I see your data, the calculation is matching perfectly. Here is how it is done.

FY19 License cost planned cost = 4285. FY20 License cost planned cost = 5714

FY19 Resource cost plan planned cost = 5760. FY20 Resource cost plan planned cost = 6240

Total FY19 Planned cost = 10045

Total FY20 Planned cost = 11954. After applying discount rate, FY20 planned cost = 11954/1.1 =  10867

Total Planned cost = 10045 + 10867 = 20912

FY19 Benefit cost = 8823

FY20 Benefit cost = 21176. After applying discount rate, FY20 benefit cost = 21176/1.1 = 19250

Total Benefit cost = 19251 + 8823 = 28073

NPV = 28073 - 20912 = 7161

 

Let me know if this helps.

 

 

 

 

 

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35 REPLIES 35

Hi Sandeep,

Could you please help me with the technical components touched during the calculation of above fields?
Ex : business rules/ table records where the values are put.

Thanks!

Any help buddies? You have already help me a lot, just last bit and I will be through the calculation.

Click update NPV is calculated. This is the cost of the project in today's terms i.e. after stripping out the cost of capital which is the discount rate

 

Am I missing something here? "Click update NPV is calculated" what I need to check?

Raj68
Mega Guru

Hi,

If one of the responses above answered your question please close this thread by marking the correct answer

Regards,

Raj

Ameet Patra
Kilo Explorer

I am not sure how npv is 0 in case I follow the attached formula? Please help me too.