NPV works well with excel???

[Guille1966]

Hi

Somebody told me that the NPV formula used by Excel doesn´t calculate the value correctely. Is this true???

I´m trying to calculate the NPV for this cash flow,

Investment: -10.000
1st period 1.000
2nd period 3.000
3rd period 3.500
4th period 4.500
5th period 10.000

Rate: 2%

If I used NPV(2%,-10.000,1.000,3.000,3.500,4.500,10.000) the result is 10.173
If I used NPV(2%,1.000,3.000,3.500,4.500,10.000)-10.000 meaning that the investment is at the begining of the first period the result is = 10,377

But if I use a financial calculator the result is 11.980,51, wich I supose is the correct value..... what I´m doing wrong?

Please any help with this matter will be very prized

 

[Edleets]

Guille
It is correct, the NPV in excel do not give you the real NPV, instead it gives you the PV. It doesn't include the CF at t=0.

Your second answer of $10,377 is correct. You maybe doing something wrong with your calculator.

Thanks
Ed.

 

[Guille1966]

Ed.

I think you´re right BUT, using my calculator I get the same result of using an on line calculator showed in this web

http://www.vantir.com/

I mean, in my calculator and in this web site I get the same result (try it if you don´t believe it.... so... wich is the right answer? 11.980,51 or 10,377??

 

[Edleets]

Guillermo
Something is wrong with that calculator. I entered same info and I got $10,173.18. However, Excel value of $10,377 is correct. You can check this by bringing individual cash flow to PV using formula CF/(1+r)^n and then totalize them and substract the initial investment. (This is also assuming the CF is at the end of year, not at the beggining)

<TABLE style="WIDTH: 140pt; BORDER-COLLAPSE: collapse" border=0 cellSpacing=0 cellPadding=0 width=187 x:str><COLGROUP><COL style="WIDTH: 42pt" span=2 width=56><COL style="WIDTH: 56pt; mso-width-source: userset; mso-width-alt: 3200" width=75><TBODY><TR style="HEIGHT: 12.75pt" height=17><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; WIDTH: 42pt; HEIGHT: 12.75pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=17 width=56></TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; WIDTH: 42pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" width=56>inversion</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; WIDTH: 56pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" class=xl23 width=75 align=right x:num="10000">10,000.00</TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; HEIGHT: 12.75pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=17></TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0">tasa</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" class=xl22 align=right x:num="0.02">2.00%</TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; HEIGHT: 12.75pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=17></TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0"></TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0"></TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; HEIGHT: 12.75pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=17>Periodo</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0">CF</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0">PV of each</TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; HEIGHT: 12.75pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=17 align=right x:num>1</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" align=right x:num>1000</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" class=xl23 align=right x:num="980.39215686274508" x:fmla="=B5/(1+$C$2)^A5">980.39</TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; HEIGHT: 12.75pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=17 align=right x:num>2</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" align=right x:num>3000</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" class=xl23 align=right x:num="2883.5063437139561" x:fmla="=B6/(1+$C$2)^A6">2,883.51</TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; HEIGHT: 12.75pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=17 align=right x:num>3</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" align=right x:num>3500</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" class=xl23 align=right x:num="3298.128170914656" x:fmla="=B7/(1+$C$2)^A7">3,298.13</TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; HEIGHT: 12.75pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=17 align=right x:num>4</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" align=right x:num>4500</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" class=xl23 align=right x:num="4157.3044171193142" x:fmla="=B8/(1+$C$2)^A8">4,157.30</TD></TR><TR style="HEIGHT: 13.5pt" height=18><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; HEIGHT: 13.5pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=18 align=right x:num>5</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" align=right x:num>10000</TD><TD style="BORDER-BOTTOM: windowtext 2pt double; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" class=xl24 align=right x:num="9057.3080982991596" x:fmla="=B9/(1+$C$2)^A9">9,057.31</TD></TR><TR style="HEIGHT: 13.5pt" height=18><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; HEIGHT: 13.5pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=18></TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0"></TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" class=xl23 align=right x:num="20376.63918690983" x:fmla="=SUM(C5:C9)">20,376.64</TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; HEIGHT: 12.75pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=17></TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0"></TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0"></TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; HEIGHT: 12.75pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" height=17></TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0">NPV</TD><TD style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; BACKGROUND-COLOR: transparent; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0" class=xl23 align=right x:num="10376.63918690983" x:fmla="=C10-C1">10,376.64</TD></TR></TBODY></TABLE>

 

[Guille1966]

Thanks Ed.

I realized that 10.376 is the correct answer. But the problem was that calculating the VNA with the on line calculator and the HiCalc of my iphone the result was the same (11.980)

Guille