Net Present Value Template

Net Present Value Template

This net present value template helps you calculate net present value given the discount rate and undiscounted cash flows.

Here is a screenshot of the net present value template:

Net Present Value Template Screenshot

 

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Net Present Value Template

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Net Present Value (NPV) is the value of all future cash flows (positive and negative) over the entire life of an investment discounted to the present. NPV analysis is a form of intrinsic valuation and is used extensively across finance and accounting for determining the value of a business, investment security, capital project, new venture, cost reduction program, and anything that involves cash flow.

 

The formula for Net Present Value is:

Net Present Value (NPV) Formula

 

 

Where:

Z1 = Cash flow in time 1

Z2 = Cash flow in time 2

r = Discount range

X0 = Cash outflow in time 0 (i.e. the purchase price / initial investment)

 

NPV analysis is used to help determine how much an investment, project, or any series of cash flows is worth. It is an all-encompassing metric, as it takes into account all revenues, expenses, and capital costs associated with an investment in its Free Cash Flow (FCF).

 

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