NPV

NPV calculates the net present value (NPV) of an investment using a discount rate and a series of future cash flows. The discount rate is the rate for one period, assumed to be annual. NPV in Excel is a bit tricky, because of how the function is implemented. Although NPV carries the idea of "net", as in the present value of future cash flows less initial cost, NPV is really just the present value of uneven cash flows. As Timothy R. Mayes, author of Financial Analysis with Microsoft Excel, says on his website TVMCalcs.com: Net present value is defined as the present value of the expected future cash flows less the initial cost of the investment...the NPV function in spreadsheets doesn't really calculate NPV. Instead, despite the word "net," the NPV function is really just a present value of