Excel Practice - NPV
Instruction
Calculate net present value of cash flows in B3:B6 using a 10% discount rate.
Formula Syntax
=NPV(rate, value1, [value2], ...)
- rate: Discount rate per period.
- value1: Input value or expression.
- [value2]: Input value or expression.
- ...: Additional optional arguments.
What it does
Calculate net present value from discounted cash flows.
cash-flow-projection.xlsx
| A | B | |
|---|---|---|
| 1 | Period | Cash Flow |
| 2 | Initial | -1000 |
| 3 | Year 1 | 300 |
| 4 | Year 2 | 350 |
| 5 | Year 3 | 400 |
| 6 | Year 4 | 450 |
| 7 | Output |
Input Formula
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Tips
- Use NPV with clean and consistent ranges for predictable results.
- Validate data types (number, text, date) before applying the formula.
- Test the formula with a small sample first, then scale it to larger ranges.