Difference between revisions of "Manuals/calci/NPV"

Revision as of 14:21, 3 October 2017

NPV(r,n1,n2,...)

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 $NPV$ analysis is sensitive to the reliability of future cash inflows that an investment or project will yield.
In $NPV(r,n1,n2,...)$ , $r$ is the discount rate for one period.
$n1,n2,n3,...$ ,are representing the payments and income.
$n1,n2,n3,...$ 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.
$NPV$ is related with the functions $PV$ and $IRR$ .
The cash flows to begin either at the end or at the beginning of the period is the main difference between $NPV$ and $PV$ .
Also $IRR$ is the rate for which $NPV$ equals zero. $NPV(IRR(....),...)=0$ .
The formula for $NPV$ is:

$NPV=\sum _{i=1}^{n}{\frac {values_{i}}{(1+rate)^{i}}}$ ,where $n$ is the number of cash flows in the list of values.

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-<div style="font-size:30px">'''NPV(r,n1,n2,…)'''</div><br/>
+<div style="font-size:30px">'''NPV(r,n1,n2,...)'''</div><br/>
 *<math>r </math> is the  discount rate for the period.
 *<math> n1,n2,n3,...  </math> indicates the payments and income.
@@ Line 8: / Line 8: @@
 *Net present value is the difference between the present value of cash inflows and the present value of cash outflows.
 *The <math>NPV</math> analysis is sensitive to the reliability of future cash inflows that an investment or project will yield.
-*In <math>NPV(r,n1,n2,…)</math>, <math>r</math> is the discount rate for one period.
+*In <math>NPV(r,n1,n2,...)</math>, <math>r</math> is the discount rate for one period.
 *<math>n1,n2,n3,...</math>,are representing the payments and income.
 *<math>n1,n2,n3,...</math> are equally spaced in time and occur at the end of the period.