NPV Function Explained
The NPV() function in Microsoft Excel calculates the Net Present Value of an investment based on a series of periodic cash flows and a discount rate. It takes three arguments: rate, values, and value. The rate argument is the discount rate, values is a series of cash flows that correspond to a schedule of payments, and value is an optional argument that is the present value of a series of future payments. The function returns the net present value of the investment.
NPV Function Syntax
NPV(rate, value1, [value2], ...)
- rate: The discount rate to be used to calculate the present value of the cash flows.
- value1: The first cash flow.
- value2: (optional) Additional cash flows.