How to calculate MPV?

If you invested Rs. 10 lakhs (1 million) in a project and expect to get a steady cash flow of Rs. 1 lakhs (100,000) every year over the next 5 years. What is the NPV of this project assuming prevailing interest rates of 15%?

Rs. 615,067 - Incorrect


Rs. 500

Rs. 600,000

plese expaln me the calculation in detail sir please

1 Answer(s)


Yashodha. This question focuses on calculating NPV of an investment in the project.
Cash inflow is Rs.10 lakhs
Cash outflow is Rs. 1 lakh every year for 5 years
Discount Rate is 15%
if you lay out these numbers is excel as -10,00,000, 1,00,000, 1,00,000, 1,00,000, 1,00,000, 1,00,000, and 15%. Then use the excel formula =NPV(rate,.......) you should be able to get the answer.

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