Excel NPV Function

This post will guide you how to use Excel NPV function with syntax and examples in Microsoft excel.

Description

The Excel NPV function returns the net present value of an investment by using a discount rate and a series of future cash flows (future payments and income).

The NPV function is a build-in function in Microsoft Excel and it is categorized as a Financial Function.

The NPV function is available in Excel 2016, Excel 2013, Excel 2010, Excel 2007, Excel 2011 for Mac.

Syntax

The syntax of the NPV function is as below:

= NPV (rate, Value1,[value2],…)

Where the NPV function arguments are:

  • Rate -This is a required argument. The discount rate over one period.
  • Value1,[value2],… – the value1 argument is required, the subsequent values are optional. All values should be numeric values, and representing a series of future payments and income, the future payments should provide the negative values, and the income should provide the positive values.

Note:

  • The NPV investment begins one period before the date of the value1 cash flow and ends with the last cash flow in the list. The NPV calculation is based on future cash flows. If your first cash flow occurs at the beginning of the first period, the first value must be added to the NPV result, not included in the values arguments. For more information, see the examples below.
  • NPV is also related to the IRR function (internal rate of return). IRR is the rate for which NPV equals zero: NPV(IRR(…), …) = 0.

Excel NPV Function Examples

The below examples will show you how to use Excel NPV Function to calculate the net present value of an investment using a discount rate and a series of future cash flows.

#1 to get the net present value of an investment, using the following formula:

=NPV(B1,B2,B3,B4) 

excel npv exampels1


Related Functions

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    The Excel FV function used to calculate the future value of an investment based on a constant interest rate. The syntax of the FV function is as below:=FV(rate,nper,pmt,[pv],[type])…
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  • Excel IRR Function
    The Excel IRR function returns the internal rate of return for a series of cash flows and the cash flows must be occurred at regular intervals (monthly or annually).The syntax of the IRR function is as below:=IRR(values, [guess])…
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  • Excel MIRR Function
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    Excel NPER Function
    The Excel NPER function returns the number of periods for an investment or loan based on periodic payment amount and a constant interest rate.The syntax of the NPER function is as below:= NPER (rate, pmt, pv, [fv], [type])…
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    The Excel PMT function returns the payment amount for a loan or investment based on constant payments and a constant interest rate.The syntax of the PMT function is as below:= PMT(rate, nper, pv,[fv],[type])…
  • Excel PPMT Function
    The Excel PPMT function returns the payment amount on the principal for a given period for a loan or investment based on constant payments and a constant interest rate. The syntax of the PPMT function is as below:=PPMT(rate, per,nper, pv,[fv],[type])…
  • Excel RATE Function
    The Excel RATE function returns the interest rate per payment period of an annuity.The syntax of the RATE function is as below:=RATE(nper, pmt,pv,[fv],[type],[guess])…
  • Excel PV Function
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