NPV (rate, values)

Basic and Crystal syntax.

Arguments
Returns

Number value

Action

NPV returns a Number specifying the net present value of an investment based on a series of periodic cash flows (payments and receipts) and a discount rate.

Example

The following example is applicable to both Basic and Crystal syntax:

Suppose that someone offers to pays you $1000 after 1 year, $2000 after 2 years, $1500 after 3 years and $1200 after 4 years. If the discount rate (the time value of money) is 5 percent, the value of this offer to you today is:

Rem Basic syntax

formula = NPV (0.05, Array (1000, 2000, 1500, 1200))


//Crystal syntax

NPV (0.05, [1000, 2000, 1500, 1200])

The formula returns 5049.44 (rounded to 2 decimals). So this scheme is worth $5,049.44 to you today. This is less than the sum of the payments, which is $5700, since you have to wait for this money.

Comments


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