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Net Present Value (NPV) for even cash flow Formula

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Net Present Value (NPV) is a method of determining the current value of all future cash flows generated by a project after accounting for the initial capital investment. Check FAQs

NPV = C \cdot (\frac{1 - {(1 + RoR)}^{- n}}{RoR}) - Initial Invt

NPV - Net Present Value (NPV)?C - Expected Cash Flow?RoR - Rate of Return?n - Number of Periods?Initial Invt - Initial Investment?

Net Present Value (NPV) for even cash flow Example

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Here is how the Net Present Value (NPV) for even cash flow equation looks like with Values.

Here is how the Net Present Value (NPV) for even cash flow equation looks like with Units.

Here is how the Net Present Value (NPV) for even cash flow equation looks like.

1981.4815 = 20000 \cdot (\frac{1 - {(1 + 5)}^{- 3}}{5}) - 2000

1981.4815 = 20000 \cdot (\frac{1 - {(1 + 5)}^{- 3}}{5}) - 2000

1981.4815 = 20000 \cdot (\frac{1 - {(1 + 5)}^{- 3}}{5}) - 2000

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Net Present Value (NPV) for even cash flow Solution

Follow our step by step solution on how to calculate Net Present Value (NPV) for even cash flow?

FIRST Step Consider the formula

NPV = C \cdot (\frac{1 - {(1 + RoR)}^{- n}}{RoR}) - Initial Invt

Next Step Substitute values of Variables

∴

NPV = 20000 \cdot (\frac{1 - {(1 + 5)}^{- 3}}{5}) - 2000

Next Step Prepare to Evaluate

∴

NPV = 20000 \cdot (\frac{1 - {(1 + 5)}^{- 3}}{5}) - 2000

Next Step Evaluate

∴

NPV = 1981.48148148148

LAST Step Rounding Answer

∴

NPV = 1981.4815

Net Present Value (NPV) for even cash flow Formula Elements

Variables

Net Present Value (NPV)

Net Present Value (NPV) is a method of determining the current value of all future cash flows generated by a project after accounting for the initial capital investment.

Symbol: NPV

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Net Present Value (NPV)

Expected Cash Flow

The Expected Cash Flow is the expected net amount of cash and cash equivalents that are being transferred into and out of a business.

Symbol: C

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Expected Cash Flow

Rate of Return

A Rate of Return is the gain or loss on an investment over a specified time period, expressed as a percentage of the investment’s cost.

Symbol: RoR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Rate of Return

Number of Periods

The Number of Periods is the periods on an annuity using the present value, periodic payment, and periodic rate.

Symbol: n

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Number of Periods

Initial Investment

The Initial Investment is the amount required to start a business or a project.

Symbol: Initial Invt

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Initial Investment

Other formulas in Capital Budgeting category

Go Payback Period

PBP = \frac{Initial Invt}{C f}

Go Cost of Retained Earnings

C RE = (\frac{D}{P c}) + g

Go Cost of Debt

R d = Int.E \cdot (1 - T r)

Go After-Tax Cost of Debt

ATCD = (R f + CS P) \cdot (1 - T r)

How to Evaluate Net Present Value (NPV) for even cash flow?

Net Present Value (NPV) for even cash flow evaluator uses Net Present Value (NPV) = Expected Cash Flow*((1-(1+Rate of Return)^-Number of Periods)/Rate of Return)-Initial Investment to evaluate the Net Present Value (NPV), Net Present Value (NPV) for even cash flow is a method of determining the current value of all future cash flows generated by a project after accounting for the initial capital investment. Net Present Value (NPV) is denoted by NPV symbol.

How to evaluate Net Present Value (NPV) for even cash flow using this online evaluator? To use this online evaluator for Net Present Value (NPV) for even cash flow, enter Expected Cash Flow (C), Rate of Return (RoR), Number of Periods (n) & Initial Investment (Initial Invt) and hit the calculate button.

FAQs on Net Present Value (NPV) for even cash flow

What is the formula to find Net Present Value (NPV) for even cash flow?

The formula of Net Present Value (NPV) for even cash flow is expressed as Net Present Value (NPV) = Expected Cash Flow*((1-(1+Rate of Return)^-Number of Periods)/Rate of Return)-Initial Investment. Here is an example- 1981.481 = 20000*((1-(1+5)^-3)/5)-2000.

How to calculate Net Present Value (NPV) for even cash flow?

With Expected Cash Flow (C), Rate of Return (RoR), Number of Periods (n) & Initial Investment (Initial Invt) we can find Net Present Value (NPV) for even cash flow using the formula - Net Present Value (NPV) = Expected Cash Flow*((1-(1+Rate of Return)^-Number of Periods)/Rate of Return)-Initial Investment.

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Net Present Value (NPV) for even cash flow Formula

Net Present Value (NPV) for even cash flow Example

Net Present Value (NPV) for even cash flow Solution

Net Present Value (NPV) for even cash flow Formula Elements

Other formulas in Capital Budgeting category

How to Evaluate Net Present Value (NPV) for even cash flow?

FAQs on Net Present Value (NPV) for even cash flow

Variable Name