NPV
Computes the net present value of a series of cash flows at a fixed discount rate. The first cash flow is treated as period 0 (today's money, not discounted), so include the upfront investment as a negative first value. Note this differs from Excel's NPV function, which discounts the first value by one period; here the convention matches how analysts usually lay out a project: outlay now, returns later.
Inputs
| Input | Accepts | Required |
|---|---|---|
Rate | Value (a single number) | Yes |
CashFlows | Series (a list of numbers) | Yes |
Outputs
| Output | Produces |
|---|---|
Result | Value (a single number) |
Settings
Typed in on the node or set by the assistant, not wired.
| Setting | Default | Notes |
|---|---|---|
Rate | 0.1 | Discount rate per period as a decimal; 0.1 for 10%. Default 0.1. |
Example
A project costs $500,000 today and returns $150,000, $175,000, $200,000, $225,000, and $250,000 over the next five years. Wire in the cash flow column (-500000, 150000, 175000, 200000, 225000, 250000) and set Rate to 0.1. The result is about $240,000; the project creates value at a 10% hurdle rate. Pull the cash flow column out of a table with ExtractColumn, or feed a projection straight from ForecastSeries.
Tips
A positive result means the cash flows beat the discount rate; negative means they fall short. If you also want the present value of each individual period, or need to fold in a terminal value, use DiscountCashFlows instead; it returns the per-period breakdown alongside the total.