+ Reply to Thread
Results 1 to 4 of 4

NPV Formula

  1. #1
    Registered User
    Join Date
    08-10-2012
    Location
    Toronto
    MS-Off Ver
    Office 365
    Posts
    35

    NPV Formula

    Hi there,

    Need an NPV formula solution where based on a fixed NPV value, i want the cashflow number to set itself to a number where it meets that NPV value. Please see the attached spreradsheet.

    I will really appreciate if someone gives me some kind of an idea,

    Thanks
    waheed
    Attached Files Attached Files

  2. #2
    Forum Guru
    Join Date
    04-13-2005
    Location
    North America
    MS-Off Ver
    2002/XP, 2007, 2024
    Posts
    16,514

    Re: NPV Formula

    Without putting much thought into it, my first thought is to use Solver (Goal Seek also might work). Call Solver and tell it to:

    1) Set Target Cell: C5
    2) To a value of: -300000
    3) By changing: J3

    That would work for one time or occasional solutions. With additional thought, the NPV function [NPV=sum(for i=1 to n)(value(i)/(1+rate)^i)] should be easily (if tediously) solved algebraically for any one of the values. If this is a frequent task, I would spend some time with the algebra of the problem and come up with that solution.
    Quote Originally Posted by shg
    Mathematics is the native language of the natural world. Just trying to become literate.

  3. #3
    Forum Moderator alansidman's Avatar
    Join Date
    02-02-2010
    Location
    Steamboat Springs, CO
    MS-Off Ver
    MS Office 365 insider Version 2506 Win 11
    Posts
    24,900

    Re: NPV Formula

    If I understand correctly, then use the Goal Seek Function on the Data Tab, Forecast, What-If

    Capture.JPG

    EDIT: I got it backwards. MrShorty is on target. Left up so you can see picture of Goal Seek
    Last edited by alansidman; 05-16-2018 at 11:20 AM.
    Alan עַם יִשְׂרָאֵל חַי


    Change an Ugly Report with Power Query
    Database Normalization
    Complete Guide to Power Query
    Man's Mind Stretched to New Dimensions Never Returns to Its Original Form

  4. #4
    Forum Expert
    Join Date
    05-01-2014
    Location
    California, US
    MS-Off Ver
    Excel 2010
    Posts
    1,795

    Re: NPV Formula

    @warshad.... It is unclear how general a solution that you want. For what you have in stated in the example, enter the following into J3:

    =(-300000 - NPV(0.08,G5:I5,J2,K5:M5)) * (1+0.08)^4

    Explanation.... This is based on the mathematical equation for the NPV, to wit:

    -300000 = G5/(1+0.08) +...+ I5/(1+0.08)^3 + (J2+J3)/(1+0.08)^4 + K5/(1+0.08)^5 +...+ M5/(1+0.08)^7

    Solve for J3 algebraically.

    PS: Of course, 1+0.08 could be written 1.08. I write 1+0.08 in anticipation of recommended design change, to wit: put 0.08 into B5, and write 1+B5.
    Last edited by joeu2004; 05-16-2018 at 12:47 PM. Reason: minor; explanation; PS

+ Reply to Thread

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Replies: 5
    Last Post: 02-16-2018, 06:50 AM
  2. Replies: 8
    Last Post: 09-22-2017, 05:41 AM
  3. Excel formula bar to display the result of the formula , not the formula?
    By max_max in forum Excel Programming / VBA / Macros
    Replies: 5
    Last Post: 12-18-2016, 07:15 PM
  4. Replies: 11
    Last Post: 06-06-2014, 03:34 PM
  5. how to hide formula in formula box, view lookup result in formula box?
    By vengatvj in forum Excel Formulas & Functions
    Replies: 2
    Last Post: 10-14-2013, 04:06 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts

Search Engine Friendly URLs by vBSEO 3.6.0 RC 1