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

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.

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

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