NPV may be calculated on an Excel spreadsheet simply by entering the project's free cash flows into Excel's NPV function.

Question

Quizplus · Accepted Answer

The NPV function in Excel calculates the present value of a series of cash flows, but it requires the discount rate and assumes the first cash flow occurs at the end of the first period, not at the start. To calculate NPV correctly, the initial investment should be added separately to the result of the NPV function.

NPV May Be Calculated on an Excel Spreadsheet Simply by Entering