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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 $50,000 up front (year 0) and saves money every year after. NPV converts future money to today's dollars. Excel's NPV assumes the first cash flow is one year out, so add year 0 separately. In E2, type =NPV(E1,B3:B7)+B2.
Target: E2
A1
| A | B | C | D | E | F | |
|---|---|---|---|---|---|---|
| 1 | Year | Cash Flow ($) | Discount rate | 0.07 | ||
| 2 | 0 | -50000 | NPV ($) | |||
| 3 | 1 | 12000 | ||||
| 4 | 2 | 12500 | ||||
| 5 | 3 | 13000 | ||||
| 6 | 4 | 13500 | ||||
| 7 | 5 | 14000 | ||||
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| 21 | NPV ($) | |||||
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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 $