NPV Discount-Rate Sensitivity: Front-Loaded vs Back-Loaded Projects

Discount Rate

Discount rate 10%

Cash-Flow Timing

Front-loaded skew 0.75

Back-loaded skew 0.75

Project horizon 8 yrs

Front-loaded total payout $1450

Back-loaded total payout $1750

Both projects invest the same $1000 upfront. By default the back-loaded project promises a larger total payout (a realistic long-horizon R&D/infrastructure case) — set both totals equal for a pure timing-only comparison, where the front-loaded project then always wins as the rate rises.

Live Decision

◆ Front-Loaded Project–

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◆ Back-Loaded Project–

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Crossover discount rate (ranking flips)

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Undiscounted vs present-value cash flows, by year

Front-loaded PV Back-loaded PV Undiscounted outline

NPV vs discount rate — where the ranking reverses