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NPV of future investment and savings
Hi
How to calculate NPV of an investment occurring in three years (2012-2014) and followed by savings it creates (2015-2030)? I wanted to calculate the NPV in the beginning of year 2009. Basically my data is row 1: years 2009-2030, row 2: investment (i.e. negative values) and row 3: savings (positive values). The NPV function gives different results when the blank cells have zeros or not. How the blank cells shuld be treated? Please advise |
#2
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NPV of future investment and savings
Ile --
In reading the documentation on 'NPV', I see that blank cells are ignored if the argument is an array. So if you selected the yearly returns as a single range (rather than 30 different arguments separated by commas) then the blank cells are ignored. I'd fill the blank cells with zeroes, and I think that's the reliable answer. HTH "ile" wrote: Hi How to calculate NPV of an investment occurring in three years (2012-2014) and followed by savings it creates (2015-2030)? I wanted to calculate the NPV in the beginning of year 2009. Basically my data is row 1: years 2009-2030, row 2: investment (i.e. negative values) and row 3: savings (positive values). The NPV function gives different results when the blank cells have zeros or not. How the blank cells shuld be treated? Please advise |
#3
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NPV of future investment and savings
Thanks HTH for the help. I rechecked the help, but it´s still a bit of
confusing to me. So I went for the "trial and error" method to enter zeros or leave the cells blank, which have no actual values. I checked the results with calculator and here how it came out regarding to blank cells: -before investment (years 2009-2011) cells must have zeros -before savings (2009-2014) cells must be left blank -after investment (2015-2030) cells must be left blank This way the investment and savings present the NPV in the beginning of 2009. Another way to do it is summarize both rows and calculate NPV from that. Note that still years before any values must contain zeros. Hope that this explanation helps others with the similar problem. "pdberger" wrote: Ile -- In reading the documentation on 'NPV', I see that blank cells are ignored if the argument is an array. So if you selected the yearly returns as a single range (rather than 30 different arguments separated by commas) then the blank cells are ignored. I'd fill the blank cells with zeroes, and I think that's the reliable answer. HTH "ile" wrote: Hi How to calculate NPV of an investment occurring in three years (2012-2014) and followed by savings it creates (2015-2030)? I wanted to calculate the NPV in the beginning of year 2009. Basically my data is row 1: years 2009-2030, row 2: investment (i.e. negative values) and row 3: savings (positive values). The NPV function gives different results when the blank cells have zeros or not. How the blank cells shuld be treated? Please advise |
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