Calculating net present value


show more Calculating net present value provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2007: Financial Analysis show less
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Calculating net present value

The net present value of an investment is the present value of the investment minus the amount of money accosted by into the investment. All of the investment's cash flows must occur at the same interval for the calculation to be accurate. In other words, if you have investments on a monthly basis, then all of them must be on a monthly basis. You calculate an investment's net present value using the NPV function. This function has two arguments: Rate, which is at the discount rate or the rate of return that you could gain from a risk-free investment, and also a range of values that contain the investment's future cash flows.

You can list up to 254 cells that contain cash flow values. As always, you should be sure to adjust the rate to account for how many times per year interest is compounded. In most cases, interest is compounded monthly, so you would divide the rate by 12. By accounting convention, if you are required to pay for the investment at the start, don't include t...

Calculating net present value
Video duration: 2m 42s 2h 18m Intermediate

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Calculating net present value provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2007: Financial Analysis

Subject:
Business
Software:
Excel
Author:
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