Evaluate a capital expenditure request with NPV, IRR, and payback
A structured capex review with cash flow model, return metrics, sensitivities, and a recommendation memo.
The prompt
Help me evaluate a capital expenditure request before it goes to approval.
Project: [WHAT is being bought or built, and why]
Upfront cost and timing: [AMOUNTS by period, including installation, training, and working capital]
Expected benefits: [revenue, cost savings, avoided costs - with the assumptions behind each]
Ongoing costs: [maintenance, staff, licenses]
Useful life and residual value: [YEARS, VALUE]
Hurdle rate / WACC: [%]
Tax rate and depreciation method: [DETAILS - or "ignore tax"]
Steps:
1. Lay out annual incremental cash flows (not accounting profit). Exclude sunk costs and allocated overhead that does not change.
2. Calculate NPV, IRR, simple payback, and discounted payback. Show the formulas.
3. Test the 3 assumptions that matter most: show the break-even value for each (the value at which NPV = 0).
4. Challenge the benefits case: what evidence supports it, and what is optimistic?
Return:
- A cash flow table by year.
- A metrics summary.
- A sensitivity table.
- A one-page approval memo: request, returns, key risks, conditions for approval, and how results will be tracked after go-live.
Flag any input I have not given as [CONFIRM]. Treat tax treatment as general guidance to verify with a tax professional.
Highlighted [brackets] are blanks to replace with your own details.
Fill in the blanks and use this promptMore Finance & Accounting prompts
What to fill in
- WHAT is being bought or built, and why
- maintenance, staff, licenses
- YEARS, VALUE
- DETAILS - or "ignore tax"
- CONFIRM
How this prompt is built
This prompt follows the RTF structure (Role, Task, Format). RTF tells the model who to be, what to do and what shape the answer should take. It is the quickest structure that still gives noticeably better results than a bare request.
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