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Excel NPV Function

If we want to calculate the net present value of an investment using a given discount rate, we can make use of the excel NPV function. This article will guide you on how to utilize this function to find the net present value.

Figure 1: Using NPV function to find net present value

General syntax of the formula

=NPV (rate, value1, [value2]…)


  • Rate- refers to the discount rate over a single period
  • Value1- this is the first value that represents the cash flow, it is mandatory
  • Value2- refers to the second value that represents the cash flow, it is optional

Understanding the formula

When supplied with the discount rate and a series of cash flows, the NPV function is able to calculate the net present value of an investment. Here, the rate is assumed to be annual, and is applied per each period. You should note that NPV ideally refers to the net value, but in real sense it is present value of uneven cash flows. You can still get the same answer if you remove the initial invested amount from the argument values that have been used in the NPV function.

For you to work with this formula;

  • The values must be arranged in a chronological order
  • Values should be equally spaced in time and occur at the end of each given period.

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Here are some problems that our users have asked and received explanations on

What is the NPV assuming cash flows all come at the end of each period? Expert_777
Solved by M. J. in 20 mins
I'msure if my problem is right. (Calculate Net Present Value in D24:R24 using the NPV function for each of those rates for Years 1-15 plus Project End, adding the initial Startup profit value in C21 to the result of the NPV in each cell.)
Solved by B. H. in 18 mins
I am trying to calculate the Excel IRR on a property DCF and I am not sure what should be input as the acquisition price (as a negative) - some suggest the sum of the NPV streams which others infer the sum of NPV streams + exit yield
Solved by I. U. in 27 mins

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