Which financial function calculates the net present value of an investment, given a fixed discount rate?
A)PV
B)FV
C)NPV
D)IPMT

Question

Quizplus · Accepted Answer

NPV (net present value) calculates the present value of incoming and outgoing cash flows over a period of time and discounts them back to the present time using a fixed discount rate. It is a common financial function used to evaluate the profitability of an investment. PV (present value) and FV (future value) are related functions but do not take into account the discount rate, while IPMT (interest payment) calculates the interest payment on a loan or investment.

Which Financial Function Calculates the Net Present Value of an Investment