Excel University Blog
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NPV
When it comes to evaluating investments in Excel, most people immediately jump to the familiar NPV and IRR functions. While these are incredibly powerful, they can lead to incorrect conclusions if we don’t fully understand how they work, especially when cash flows vary or are irregular. In this post, we’ll walk through six powerful finance…
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When evaluating where to invest our money, whether it’s in education, a new business, or a CD, understanding the rate of return is essential. Thankfully, Excel makes this process straightforward with the IRR function, or Internal Rate of Return. This function helps us calculate the annualized rate our cash flows will earn over time. In…
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When assessing whether an investment is financially worthwhile, smart investors don’t guess … they measure. Excel has multiple functions that can measure an investment’s net present value. Excel’s classic net present value function, NPV, assumes cash flows occur at regular intervals. But what do we do when the cash flow timing is irregular? That’s where…
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Welcome! In today’s post, we’ll walk through the concept of Net Present Value (NPV) and how to calculate it accurately in Excel. If you’ve ever wondered how to measure whether an investment is worth it, NPV is one of the most practical tools you can use. But, as with many financial functions, there’s a catch.…
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