How to use the Excel XNPV function

Summary

The Excel XNPV function is a financial function that calculates the net present value (NPV) of an investment using a discount rate and a series of cash flows that occur at irregular intervals.

Purpose

Calculate net present value for irregular cash flows

Return value

Net present value

Syntax

=XNPV (rate, values, dates)

Arguments

rate - Discount rate to apply to the cash flows.
values - Values representing cash flows.
dates - Dates that correspond to cash flows.

Usage notes

The Excel XNPV function calculates the net present value (NPV) of an investment based on a discount rate and a series of cash flows that occur at irregular intervals. Cash flows need to be listed with dates in chronological order. Negative values represent cash paid out; positive values represent cash received.In the example shown, the formula in F6 is:

=XNPV(F4,B5:B10,C5:C10)

XNPV doesn’t discount the initial cash flow. Subsequent payments are discounted based on a 365-day year. To discount to a particular valuation date, you can set up XNPV so that the first cashflow is zero, associated with the valuation date.

Notes:

Rate is provided as a percentage (.12 for 12%)
Dates and values must be in chronological order.
Dates must be valid Excel dates
XNPV doesn’t discount the initial cash flow

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