Manuals/calci/NPV

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NPV()


  • First parameter is the discount rate for the period.
  • From the second parameter indicates the payments and income.
    • NPV(), returns the net present value of an investment based on a series of periodic cash flows and a discount rate.

Description

  • This function gives the net present value of an investment.
  • Net present value is the difference between the present value of cash inflows and the present value of cash outflows.
  • The Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle NPV} analysis is sensitive to the reliability of future cash inflows that an investment or project will yield.
  • In Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle NPV()} , first parameter is the discount rate for one period.
  • From the second parameter are representing the payments and income.
  • Payments are equally spaced in time and occur at the end of the period.
  • Arguments can be numbers ,empty cells,logical values or text representations of numbers.
  • But error values or text that cannot be translated in to numbers.
  • Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle NPV} is related with the functions Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle PV} and Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle IRR} .
  • The cash flows to begin either at the end or at the beginning of the period is the main difference between Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle NPV} and Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle PV} .
  • Also Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle IRR} is the rate for which Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle NPV} equals zero.Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle NPV(IRR(....),...)=0} .
  • The formula for Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle NPV} is:

Failed to parse (Conversion error. Server ("https://wikimedia.org/api/rest_") reported: "Cannot get mml. Server problem."): {\displaystyle NPV=\sum _{i=1}^{n}{\frac {values_{i}}{(1+rate)^{i}}}} ,where Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle n} is the number of cash flows in the list of values.


Examples

  1. =NPV(9%,-55000,2000,3500,6200,8500,10000) = -30193.387068
  2. =NPV(6%,-2000,294,489,780,520,1250) = 673.05
  3. =NPV(12%,-25000,3000,7500,4200,5100,12700,10000) = 1929.2652056111

Related Videos

NPV Function

See Also

References


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