How does the NPV function work?

[GIS2013]

Hi,
I am trying to figure out why there are differences between results when using NPV vs. calculating manually.
Unfortunately I cannot upload sample files due to admin restrictions.
However it's really simple: Say rate is 10% and initial investment is -1000 (in period 0), and cash flow is 200, 400, 600 in years 1, 2, 3.
When using NPV I get -33, and when calculating manually -37.
Any help?
Many thanks

[jason.b75]

Please provide your method of manual calculation.

The function is based on the initial investment being at the end of the first period, if it is at the beginning then you need to add it outside of the function.

Initial investment at end of first period.

=NPV(10%,-1000,200,400,600)

Initial Investment at start of first period.

=NPV(10%,200,400,600)-1000

[GIS2013]

Sure: -1000+200/(1+5.5%)^1+400/(1+5.5%)^2+600/(1+5.5%)^3=-37

[jason.b75]

Looks like the second method (see edit to my previous reply).

[XOR LX]

Sure: -1000+200/(1+5.5%)^1+400/(1+5.5%)^2+600/(1+5.5%)^3=-37

Hi,

From https://support.office.com/en-us/art...ad=US&fromAR=1:

"If your first cash flow occurs at the beginning of the first period, the first value must be added to the NPV result, not included in the values arguments."

Hence:

=-1000+NPV(5.5%,200,400,600)

Regards

[GIS2013]

Oh I understand now. Many thanks for your help!