NPV

Calculates the net present value of an investment by using a discount rate and a series of future payments (negative values) and income (positive values).

Syntax

NPV(rate,value1,value2, ...)

Rate   is the rate of discount over the length of one period.

Value1, value2, ...   are 1 to 29 arguments representing the payments and income.

Remarks

Example 1

In the following example:

RateValue1Value2Value3Value4Formula Description (Result)
10%-10000300042006800=NPV([Rate], [Value1], [Value2], [Value3], [Value4]) Net present value of this investment (1,188.44)

In the preceding example, you include the initial $10,000 cost as one of the values, because the payment occurs at the end of the first period.

Example 2

In the following example:

RateValue1Value2Value3Value4Value5Value6Formula Description (Result)
8%4000080009200100001200014500=NPV(Rate, [Value2], [Value3], [Value4], [Value5], [Value6])+[Value1] Net present value of this investment (1,922.06)
8%4000080009200100001200014500=NPV(Rate, [Value2], [Value3], [Value4], [Value5], [Value6], -9000)+[Value1] Net present value of this investment, with a loss in the sixth year of 9000 (-3,749.47)

In the preceding example, you don't include the initial $40,000 cost as one of the values, because the payment occurs at the beginning of the first period.