Discounted Cash Flow Analysis
10-year DCF model with NPV, IRR, and payback period calculations
Net Present Value
$20.3M
Discounted at 9.5% WACC
Internal Rate of Return
12.5%
vs. 9.5% hurdle rate
Payback Year
2032
Cumulative CF turns positive
10-Year Net Value
$138.7M
Undiscounted
Discounted Cash Flow Schedule
| Line Item | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Benefits | $0 | $7.1M | $28.6M | $54.5M | $53.0M | $54.8M | $56.8M | $58.7M | $60.8M | $62.9M | $437.3M |
| Total Costs | $72.6M | $79.2M | $46.8M | $14.7M | $13.1M | $13.5M | $14.0M | $14.4M | $14.9M | $15.4M | $298.5M |
| Net Cash Flow | $-72.6M | $-72.1M | $-18.1M | $39.8M | $39.9M | $41.3M | $42.8M | $44.3M | $45.9M | $47.5M | $138.7M |
| Cumulative Cash Flow | $-72.6M | $-144.7M | $-162.8M | $-123.0M | $-83.1M | $-41.8M | $992K | $45.3M | $91.2M | $138.7M | |
| Discount Factor (9.5%) | 0.9132 | 0.8340 | 0.7617 | 0.6956 | 0.6352 | 0.5801 | 0.5298 | 0.4838 | 0.4418 | 0.4035 | |
| Discounted Cash Flow | $-66.3M | $-60.1M | $-13.8M | $27.7M | $25.3M | $24.0M | $22.7M | $21.4M | $20.3M | $19.2M | $20.3M |
Net Cash Flow vs. Discounted Cash Flow
Payback Trajectory
Methodology Notes
DerivedDiscount Rate
WACC of 9.5% provided by Agilent Treasury, reflecting the company's weighted average cost of capital as of Q4 2025.
IRR Calculation
Internal Rate of Return computed via Newton-Raphson iteration on the 10-year net cash flow series. The IRR of 12.5% exceeds the hurdle rate, indicating value creation.
Payback Period
Simple payback occurs in 2032 when cumulative undiscounted net cash flow turns positive. This represents year 7 of the program.
Growth Assumptions
Benefits grow at Agilent's projected revenue CAGR of 3.5%. SAP license costs escalate at 3.3% per annum per RISE contract terms.