NPV(Double, Double) Method
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Returns a value specifying the net present value of an investment based on a series of periodic cash flows (payments and receipts) and a discount rate.
public: static double NPV(double Rate, cli::array <double> ^ % ValueArray);
public static double NPV (double Rate, ref double ValueArray);
static member NPV : double * Double -> double
Public Function NPV (Rate As Double, ByRef ValueArray As Double()) As Double
Required. The discount rate over the length of the period, expressed as a decimal.
Required. Array of Double specifying cash flow values. The array must contain at least one negative value (a payment) and one positive value (a receipt).
The net present value of an investment based on a series of periodic cash flows (payments and receipts) and a discount rate.
Nothing, rank of
ValueArray <> 1, or
Rate = -1
This example uses the
NPV function to return the net present value for a series of cash flows contained in the array
values(). The return value, stored in
FixedRetRate, represents the fixed internal rate of return.
' Define money format. Dim MoneyFmt As String = "###,##0.00" ' Define percentage format. Dim PercentFmt As String = "#0.00" Dim values(4) As Double ' Business start-up costs. values(0) = -70000 ' Positive cash flows reflecting income for four successive years. values(1) = 22000 values(2) = 25000 values(3) = 28000 values(4) = 31000 ' Use the NPV function to calculate the net present value. ' Set fixed internal rate. Dim FixedRetRate As Double = 0.0625 ' Calculate net present value. Dim NetPVal As Double = NPV(FixedRetRate, values) ' Display net present value. MsgBox("The net present value of these cash flows is " & Format(NetPVal, MoneyFmt) & ".")
The net present value of an investment is the current value of a future series of payments and receipts.
NPV function uses the order of values within the array to interpret the order of payments and receipts. Be sure to enter your payment and receipt values in the correct sequence.
NPV investment begins one period before the date of the first cash flow value and ends with the last cash flow value in the array.
The net present value calculation is based on future cash flows. If your first cash flow occurs at the beginning of the first period, the first value must be added to the value returned by
NPV and must not be included in the cash flow values of
NPV function is similar to the
PV function (present value) except that the
PV function allows cash flows to begin either at the end or the beginning of a period. Unlike the variable
NPV cash flow values,
PV cash flows must be fixed throughout the investment.