On Nov 19, 9:07 am, ExcelMonkey
wrote:
I have a stream of cashflows for an existing asset which are assumed to be
annual and based on calendar year-end. Asumed the dates range from
12/31/2008 to 12/31/2013 (6 periods) and the cashflow is $10 per period.

If I discount this flow using an NPV @ 8.6% my present value is $45.40.
Does this implicitly assume my time 0 date is 12/31/2007 (i.e. 365 days
prior to my first period end date).

Notwithstanding you apparent disinterest in the solution (if I
understand your follow-up correctly), you question can be answered.

Your observation is essentially correct. See the mathematical formula
on the NPV Help page. Notice that j starts at 1, not zero.

I think it is more correct to say that the Excel NPV function assumes
that the first cash flow in its argument list is CF1, the first period
after the initial cash flow (typically denoted as CF0).

In other words, you should not include the initial cash flow in the
NPV arguments. You should simply add CF0 to the NPV result. Unless,
of course, you would like to roll back the net present value to a
period before the first cash flow.