# How to calculate npv    A guide to the NPV formula in Excel when performing financial analysis. It's important to understand exactly how the NPV formula works in Excel and the math behind it. NPV = F / [ (1 + r)^n ] where, PV = Present Value, F = Future payment (cash flow), r = Discount rate, n = the number of periods in the future This video explains the concept of Net Present Value and illustrates how to calculate the Net Present Value of a project via an example. Edspira is your source for business and financial education. This article was co-authored by our trained team of editors and researchers who validated it for accuracy and comprehensiveness. wikiHow's Content Management Team carefully monitors the work from our editorial staff to ensure that each article meets our high standards. The wikiHow Tech Team also In the business world, Net present value (or NPV) is one of the most helpful tools available for financial decision making. Usually, NPV is used to estimate whether a certain purchase or investment is worth more in the long run than simply investing an equivalent amount of money in a savings account at the bank. Calculate the NPV (Net Present Value) of an investment with an unlimited number of cash flows. How to calculate NPV & IRR using Microsoft Excel By Dan Way. Go with the cash flow: Calculate NPV and IRR in Excel. Excel for Office 365 Excel for the web Excel 2019 Excel 2016 Excel 2013 Excel 2010 Excel 2007 More. Less. Have you been losing sleep figuring out the best way to maximize profitability and minimize risk on your business investments? Net present value is used to estimate the profitability of projects or investments. Here's how to calculate NPV using Microsoft Excel. Net Present Value (NPV) Money now is more valuable than money later on. Why? Because you can use money to make more money! You could run a business, or buy something now and sell it later for more, or simply put the money in the bank to earn interest. The formula for NPV varies depending on the number and consistency of future cash flows. If there’s one cash flow from a project that will be paid one year from now, the calculation for the net present value is as follows: Many projects generate revenue at varying rates over time. In this case