NPV

Excel NPV Function

The Net Present Value (NPV) is computed using the NPV function.

The type is =NPV.

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

rate: The Discount rate.

value: The cells where the cash flows are.

Use net present value (NPV) to compute and determine if an investment is profitable in the long run.

Step 1) Type the rate value

The rate is the required Discount Rate that you want to use.

We will use 10% in this example.

Ensure that you enter the value as percentage(%).

Step 2) Start the NPV function

4. Select a cell (E9)

5. Type =NPV

6. Double click the NPV command

Try it yourself to follow the tutorial!

Take a look at the values in the following example and give it a try!

Step 3) Add values to the function

Let us add the rate and the values from 1 to 10 to the function.

7. Select cell (B9)

8. Type , or ;

9. Select the range (B2:K2)

10. Hit enter

Note: A symbol, such as a , or ; is used to separate the various components of the function;

The symbol is determined by your language preferences.

Have you computed 377,87?

Best wishes! You have computed the net present value (NPV) for a ten-year period with a 10% discount rate.