FinancialLevel: ExpertAvailable in: Excel 2007+
In this article
- Syntax
- Examples
- Example 1
- Common errors and fixes
- Related functions
NPV discounts future cash flows to today’s value at a given rate — the core of investment appraisal.
Syntax
=NPV(rate, value1, [value2], ...)
| Argument |
What it means |
rate |
Discount rate per period. |
value1… |
Cash flows at the END of periods 1, 2, 3… |
Examples
Example 1
=NPV(10%, C3:C7) + C2
Project NPV: C2 is the initial investment at time 0 (negative), added outside NPV.
Common errors and fixes
| You see |
Why, and the fix |
NPV too low/high |
Including the time-0 investment inside NPV discounts it by one period. Add it separately. |
XNPV · IRR · XIRR
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