How to Use Net Present Value (NPV) Let's say you're contemplating setting up a factory that's going to need initial funds of $250,000 during the first year.

Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when ...

Knowing how to calculate the net present value of an investment is a useful skill to have if you want to make the best decisions for your portfolio. Keep in mind, however, that NPV shouldn’t be ...

It’s possible to calculate the present value of an annuity using Excel, but you’ll need some information at your fingertips: the annuitization period, the payment amount, and the interest rate.

Enter $0.60 into cell B3. Enter 6% into cell B5. Enter 22% into cell B6. Now, you need to find the expected dividend in one year. In cell B4, enter "=B3* (1+B5)," which gives you 0.64 for the ...

We calculated that the net present value of all of the lemonade stand's cash flows was $34.20. However, to calculate the profitability index, we need the present value of the future cash flows only.

We calculate that the present value of the free cash flows is $326. Thus, if you were to sell this business based on its expected cash flows and a 10% discount rate, $326.00 would be a very fair ...