jackdog
asked on
Excel NPV
I have been asked to calculate a mid-year NPV for my project. Apparently excel only calculates NPV at year end with the NPV formula. How can I calculate a mid-year NPV in excel?
Thanks
DC
Thanks
DC
ASKER
The XNPV looks complex, I'd prefer not to go down that path.
So if I discount each annual cashflow by the number of half years from today and sum the results then I have a mid-point NPV?
Thanks
DC
So if I discount each annual cashflow by the number of half years from today and sum the results then I have a mid-point NPV?
Thanks
DC
ASKER CERTIFIED SOLUTION
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(1) Use XNPV which allows a date range
You need to enable the Analysis Toolpak add-in to use this formula
From the menu
Tools - Addins- Analysis Toolpak
(2) Derive the NPV manually, cashflow by cashflow
ie if the discounting is at month 6, month 18, month 30 etc then at a 10% disocount rate the respective discount factors are 1/(1+10%)^(6/12) = 0.95 etc
Discounted Cashflow 1 = Cashflow 1 * 0.95
Discounted Cashflow 2 = Cashflow 2 * 0.87
Discounted Cashflow 2 = Cashflow 3 * 0.79
Are you familiar with NPV? Let me know if I need to explain more
Cheers
Dave