Difference between revisions of "Documentation/How Tos/Calc: NPV function"

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== NPV ==
 
== NPV ==
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: where cells A1:A3 contain <tt>'''1000'''</tt>, <tt>'''2000'''</tt> and <tt>'''3000'''</tt>, returns <tt>'''4943.21'''</tt> similarly.  
 
: where cells A1:A3 contain <tt>'''1000'''</tt>, <tt>'''2000'''</tt> and <tt>'''3000'''</tt>, returns <tt>'''4943.21'''</tt> similarly.  
  
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=== See also: ===
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=== Issues: ===
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[[Documentation/How_Tos/Calc: IRR function|'''IRR''']],
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* The discount rate chosen is assumed to compound each period. If the period is say one month, and you wish to calculate using a competitive return known over one year, you might choose a discount rate of a twelfth of the competitive return - but be aware that this is not absolutely accurate. There is no simple formula.
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[[Documentation/How_Tos/Calc: MIRR function|'''MIRR''']],
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[[Documentation/How_Tos/Calc: XIRR function|'''XIRR''']],
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[[Documentation/How_Tos/Calc: XNPV function|'''XNPV''']],
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[[Documentation/How_Tos/Calc: PV function|'''PV''']]
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[[Documentation/How_Tos/Calc: Financial functions|'''Financial functions''']]
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{{SeeAlso|EN|
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* [[Documentation/How_Tos/Calc: IRR function|IRR]]
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* [[Documentation/How_Tos/Calc: MIRR function|MIRR]]
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* [[Documentation/How_Tos/Calc: XIRR function|XIRR]]
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* [[Documentation/How_Tos/Calc: XNPV function|XNPV]]
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* [[Documentation/How_Tos/Calc: PV function|PV]]
  
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[[Documentation/How_Tos/Calc: Functions listed alphabetically|'''Functions listed alphabetically''']],
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* [[Documentation/How_Tos/Calc: Financial functions|Financial functions]]
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[[Documentation/How_Tos/Calc: Functions listed by category|'''Functions listed by category''']]
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=== Issues: ===
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* [[Documentation/How_Tos/Calc: Functions listed alphabetically|Functions listed alphabetically]]
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* The discount rate chosen is assumed to compound each period. If the period is say one month, and you wish to calculate using a competitive return known over one year, you might choose a discount rate of a twelfth of the competitive return - but be aware that this is not absolutely accurate. There is no simple formula.
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* [[Documentation/How_Tos/Calc: Functions listed by category|Functions listed by category]]}}
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[[Category: Documentation/Reference/Calc/Financial functions]]

Latest revision as of 15:58, 30 January 2024

NPV

Returns the net present value of an investment with regular cash payments.

Syntax:

NPV(discountrate; payment1; payment2; ... payment30)

payment1 to payment30 are up to 30 numbers or ranges containing numbers, representing payments made at the end of each of a series of fixed length periods. The payments may be both positive and negative, for income and outgoing.
discountrate is the discount rate (expressed as a fraction of 1) which you consider applies to one single period. It is assumed to be constant for all periods.
NPV calculates the net present value using the formula:
Calc npv equation.png

Example:

NPV(8.75%; 1000; 2000; 3000)

where the discount rate 8.75% is the assumed competitive return over one year, and 1000 is to be paid at the end of year 1, 2000 at the end of year 2 and 3000 at the end of year 3, returns 4943.21 as currency.

NPV(0.0875; A1:A3)

where cells A1:A3 contain 1000, 2000 and 3000, returns 4943.21 similarly.

Issues:

  • The discount rate chosen is assumed to compound each period. If the period is say one month, and you wish to calculate using a competitive return known over one year, you might choose a discount rate of a twelfth of the competitive return - but be aware that this is not absolutely accurate. There is no simple formula.


See Also
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