NPV

The NPV function returns the net present value of an investment based on a discount rate and a series of future payments (negative values) and income (positive values).

Syntax

NPV (Rate, value1,...valueN?) - > Number

Arguments

Arguments	Datatype	Description
Rate	Number	The rate of discount
value1	Number, Node reference	The node that contains the order of cash flows for which you want to calculate the NPV. This is a required argument.
valueN?	Number, Node reference	The additional nodes that contains the order of cash flows for which you want to calculate the NPV. This is an optional argument

Example

Consider the below example of a project with an initial investment of $10,000 and cash inflows of $4,000 for the subsequent four years. Discount rate is 12%. The objective is to evaluate the project by calculating NPV.

Periods	0	1	2	3	4
Initial Investment	-10000	-	-	-	-
Cash Inflows	-	4000	4000	4000	4000

To achieve this, the following formula should be written in the [NPV] node:

NPV(12% ,[Cash Inflows].ALL_PERIODS)+[Initial Investment]

We are including .ALL_PERIODS in the formula so that it takes the value of the entire year's cash inflow rather a single period.

Result

NPV	2149.40