In this lesson we are going to go through how to calculate the Net Present Value of an investment using the NPV function.
For this we are going to need the cost of capital for the firm, which for us is 6%, as well as the expected return over a period of time. (highlight 3 year plan)
We’ll write Equals, NPV, select the rate, and then however many projected return values we have available.
We are then given the NPV for this particular investment. We can now compare the NPV to the original investment, and determine whether it would be worth accepting the project.
In this lesson we have shown how to get the Net Present Value of an investment using the NPV function.