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.
In other words, the cash flows are not annuities. Here is the basic equation for calculating the present value of uneven streams of cash flows: NPV(p)=CF(0) + CF(1)/(1+i)t + CF(2)/(1+i)t + CF(3)/(1+i)t + CF(4)/(1+i)t. Tip: You can extend this equation for as many time periods as the project lasts.