Question

How do you calculate Profit Present Value in excel?

Answer 1

in Simple method we can calculate as below,

	Example for calculation of NPV
		Amount invested =		$   1,00,000.00
		Cash inflow is	Year 1 =	$       40,000.00
			Year 2 =	$       50,500.00
			Year 3 =	$       75,500.00
		PVF =		10%
	Period	Particulars	Net Inflow/ Outflow (A)	PVF @ 10% (B)	Present Value (A X B)
	0	Outflow	$               -1,00,000.00	$                 1.00	$         -1,00,000.00
	1	Inflow	$                     40,000.00	$                 0.91	$               36,363.64
	2	Inflow	$                     50,500.00	$                 0.83	$               41,735.54
	3	Inflow	$                     75,500.00	$                 0.75	$               56,724.27
		Net Present Value			$               34,823.44
	In this method simple we have to put the data in as per above in every Cell
	For Present Value Factor (PVF), we can use the below formula,
		Year 0 =	1
		Year 1 =	1 / 1.10
		Year 2 =	Result of year 1 / 1.10
		Year 3 =	Result of year 2 / 1.10
		Present Value = Inflow/ Outflow is multiply with present value factor
	With Excel Formula we calculate as below,
	Present value factor =		10%
	Period	Particulars	Net Inflow/ Outflow (A)
	0	Outflow	$               -1,00,000.00
	1	Inflow	$                     40,000.00
	2	Inflow	$                     50,500.00
	3	Inflow	$                     75,500.00
	NPV =	₹ 1,34,823.44
	Formula =	=NPV(cell of NPV factor (10% in this case) , select the coloumn of inflow and outflow from year 0 to year 3)