• Originally published: 22/03/2018 13:58
Publication number: ELQ-58839-1
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# NPV Calculator (Excel Template)

Calculate Net Present Value with ease by using this Excel spreadsheet.

Description
Net Present Value (NPV) is used to calculate the difference between cash inflows from the investments and the cost of investments.

The formula is the following:

When cash arrivals are EVEN:
NPVt=1 to T = ∑ Xt/(1 + R)t – Xo

Where:
> Xt = total cash inflow for period t
> Xo = net initial investment expenditures
> R = discount rate, finally
> t = total time period count

When cash arrivals are UNEVEN:
NPV = [Ci1/ (1+r)1 + Ci2/(1+r)2 + Ci3/(1+r)3 + …] – Xo

Where:
> R is the specified return rate per period;
> Ci1 is the consolidated cash arrival during the first period;
> Ci2 is the consolidated cash arrival during the second period;
> Ci3 is the consolidated cash arrival during the third period, etc…

By using the NPV formula, investors can see the difference between cash inflows from the investments and cost of investments.

If the difference is positive, the project is great. If it is negative, it is not worth investors' time.

This Best Practice includes
1 Excel File

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