Anyone have an idea how to create a NPV Spreadsheet which intakes a 6% discount factor.
My actual question is very similar to this, If someone could give me a step by step breakdown it would be much appreciated
The way to calculate an NPV Spreadsheet using the NPV Function are:
=NPV(discount rate, series of cash flow)
Step 1: Set a discount rate in a cell.
Step 2: Establish a series of cash flows (must be in consecutive cells).
Step 3: Type “=NPV(“ and select the discount rate “,” then select the cash flow cells and “)”.
What is an NPV Function?
This refers to the excel function that is used to calculate the net present value and the discount rates for cash flows.
Hence, we can see that given that you have the discount factor, the annual operating costs, and annual benefits, you would then need to add the present value of all +ve cash flows and subtract the present value of all -ve cash flows.
