Sounds to me like you're asking an algebra question rather than an Excel
question, Marc; is that right? NPV is easy enough, but only if you can
calculate (well, estimate) the quantity of each of the future earnings.

Why do you say the capital cost varies inversely with the risk? Are you
saying the capital investment is the same regardless, so the capital LOSS (so
to speak) varies with the estimated risk? Because it seems to me that two
investments can have the same probability of failure and yet one require more
capital investment than the other.

If your inputs are only 1) capital investment, 2) risk of failure and 3)
estimated future earnings, period by period, the calculating net earnings
each period should be easy enough if you know how quickly the original
investment should be recouped, and the NPV of the remainder can be calculated
from that. Or am I totally misunderstanding the problem?

--- "Marc Shields" wrote:
I am trying to do a project where I calculate the net present value of brand earnings as determined. To do this, I need to calculate a discount value which I know how to calculate it conceptually but not actually.

I have to calculate an S curve using a subjectively derived brand risk index score (a number between 1 and 100 where 100 is the lowest risk and 1 the highest)This established the brand risk profile which is inversely related to the cost of capital (high risk profile has a low cost of capital, a low profile a high cost). I know the lowest cost of capital is about 5% (risk free) and the average wieghted cost of capital (for an industry) but I dont know the highest cost...( I could guess at the max however).

Only thing is, I am not sure how to calculate it.