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XNPV

The XNPV function in Google Sheets calculates the net present value of an investment based on a specified series of potentially irregularly spaced cash flows and a discount rate. This powerful financial function allows you to evaluate the profitability of investments or projects.

Function Syntax and Parameters

Syntax: XNPV(discount, cashflow_amounts, cashflow_dates)

Parameters:

  • discount: The discount rate to apply to the cash flows.
  • cashflow_amounts: An array or range of cash flow amounts.
  • cashflow_dates: An array or range of dates corresponding to the cash flow amounts.

Step-by-Step Tutorial

  1. Using XNPV with cash flow amounts and dates:
    • Example: =XNPV(0.1, B2:B6, A2:A6)
    • Result: Calculated net present value based on the given cash flow amounts, dates, and discount rate.

Use Cases and Scenarios

  1. Capital Budgeting: Evaluate the profitability of different investment projects based on their cash flows and discount rates.
  2. Investment Analysis: Determine the net present value of a series of future cash flows to assess the viability of an investment opportunity.
  3. Business Valuation: Calculate the present value of expected future cash flows to determine the worth of a company.

Related Functions

  • NPV: Calculate the net present value of a series of cash flows with an even time interval.
  • IRR: Calculate the internal rate of return for a series of potentially irregular cash flows.

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