Net Presant value



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In vedio of NPV you calculate Net Presant value is 699 but if i calculate that cash flow on excel with NPV formula the value comes 635. why it is?

1 Answer(s)


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Hi AMIT,
the reason for this is because 10,000 is initial investment in the beginning of year. You need to understand the working of excel formula for this.

Desired result can be obtained by putting "=NPV(0.1,4000,4000,5000) -10000" in excel.

to understand the working of NPV excel formula goto to below mentioned link and see example 2 there.
http://office.microsoft.com/en-in/excel-help/npv-function-HP010342728.aspx

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