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Module 8: Analysis · Lesson 44 of 46

NPV

Decide if a project pays off with Net Present Value.

Step 1 of 10%

A solar project costs $50,000 up front (year 0) and saves money every year after. NPV converts future money to today's dollars. Excel's NPV assumes the first cash flow is one year out, so add year 0 separately. In E2, type =NPV(E1,B3:B7)+B2.

Target: E2

A1
ABCDEF
1
Year
Cash Flow ($)
Discount rate
0.07
2
0
-50000
NPV ($)
3
1
12000
4
2
12500
5
3
13000
6
4
13500
7
5
14000
8
9
10
11
12
13
14
15
16
17
18
19
20
21
NPV ($)
22

Arrow keys move · drag or shift-click to select a range · Ctrl/Cmd+D fill down · Ctrl/Cmd+R fill right · Alt+= AutoSum · F4 toggles $

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