This project appraisal template is a ready-to-use Excel spreadsheet that puts two cash flows side by side and tells you which one creates more value — before you commit money to either.

PMBOK® 8 places this work in the Finance Performance Domain, which names return on investment (ROI), internal rate of return (IRR), payback period and net present value (NPV) among the metrics used to measure project success and alignment with organizational goals. This spreadsheet calculates all four from the same cash flow, so the comparison is arithmetic instead of opinion.

What this project appraisal template includes

The download is a single-sheet Excel workbook (.xlsx) with live formulas throughout:

• Two cash flows, 19 periods each — enter outflows (costs) and inflows (revenue or cost savings) period by period. You choose the unit: quarter, month or year.
• Net result and cumulative result — calculated for every period, so you can see exactly when the investment turns positive.
• Four decision metrics per cash flow — IRR, NPV, payback period and ROI, recalculated the moment you change a number.
• Exact payback — not just “period 3”, but 2.50 periods, interpolated inside the period where the cumulative result crosses zero.
• A written answer — one sentence naming the cash flow with the higher NPV.
• A worked example already filled in — overwrite it with your own figures and every metric follows.

The four metrics, and the question each one answers

• NPV — net present value. Is this worth more than the money it ties up? Every future period is discounted by the required return you set, and the results are added up. Positive means the project beats that required return; negative means it does not. This is the metric the spreadsheet uses to pick the winner.
• IRR — internal rate of return. What return does this cash flow actually earn? It is the discount rate at which NPV would be exactly zero. Compare it with your required return: above it, the project pays; below it, it does not.
• Payback period. How long until I get my money back? The number of periods the cumulative result stays negative. The exact payback refines it to a fraction of a period.
• ROI — return on investment. How much did the investment multiply? Here it is the total net result divided by the outflow in period 0. ROI ignores the time value of money, which is precisely why you read it alongside NPV, never instead of it.

How to use it

1. Set the unit (cell C1). Quarter, month or year — whatever your cash flow is measured in. Every period column and both cash flows follow it.
2. Set the required return (cell C2). This is the rate per period, matching the unit in C1. Working in quarters, enter the quarterly rate, not the annual one.
3. Fill in the outflows and the inflows for each cash flow, period by period. Period 0 is where the initial investment normally goes.
4. Read the four metrics in the comparison block at the bottom, one column per cash flow.
5. Decide by NPV and use the other three as context: IRR for the return earned, payback for the exposure, ROI for the size of the multiple.

The worked example inside the file

The spreadsheet ships filled in with two alternatives evaluated at a required return of 14% per period:

Notice what the example teaches: cash flow 1 shows a positive ROI of 65% and still has a negative NPV. It does return more money than it costs — just too slowly, and not enough to beat the 14% the organization requires per period. That gap between ROI and NPV is the whole reason to run both.

When to use this project appraisal template

• Business case and project selection: compare two ways of solving the same problem and put a number behind the recommendation.
• Approval gates: a sponsor who sees NPV, IRR, payback and ROI on one screen can approve or refuse without reading a full plan.
• Make-or-buy decisions: PMBOK 8 lists payback period, ROI, IRR, discounted cash flow and NPV among the techniques used to decide whether to build something inside the project or buy it externally.
• Benefits management: the expected financial value of a project may be expressed as NPV — this is where that number comes from.
• Phase reviews: replace the estimates with actuals as they arrive and check whether the project still makes financial sense.

PMBOK 8 alignment

• Classification: Tool & Technique — Cost-benefit analysis
• Domain: Finance
• Also used in: Make-or-buy analysis; the Benefits management plan
• Source: PMBOK Guide, Eighth Edition, Section 2.4 (Finance Performance Domain) and Section 5 (Tools and Techniques)

Recommended Resource

Want to master project management with PMBOK 8? The PMBOK Guide 8th Edition is the definitive reference. Get your copy and use it alongside these free resources.

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Complete Guides & Articles

Get the most out of this project appraisal template with the companion guides:

• The Finance Performance Domain (PMBOK 8) — where appraisal, budgeting and financial control sit in the guide.
• Plan Financial Management in PMBOK 8 — how the required return and the funding rules get decided in the first place.
• Did Your Project Deliver Value? — closing the loop after delivery, against the numbers you appraised here.
• Free project management templates — the full library, aligned to PMBOK 8.