Net Present Value

The Net Present Value) of $1 = 1/(1+i)N where i is the interest or discount rate, and the period number is N.

The Net Present Value of a series of cash flows = Sum of this series for all values from time period = 0 > n = At/(1+r)t > n

Net present values calculated by Excel, when used for investment analysis, are incorrect.

This is because the NPV function was incorrectly defined by someone in the past, and has never been corrected!

See the NPV page for further information and how to correct Excel NPV.

Software Links

Investment-Calc More Info

Reference Pages

Discounted Cash Flow

Discount Rate

Internal Rate of Return

NPV Rule

NPV

Solver

Fisher Formula