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Asked: 2026-05-15T10:51:09+00:00

I am using the NPV() function in VB.NET to get NPV for a set

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I am using the NPV() function in VB.NET to get NPV for a set of cash flows.

However, the result of NPV() is not consistent with my results performing the calculation manually (nor the Investopedia NPV calc… which matches my manual results)

My correct manual results and the NPV() results are close, within 5%.. but not the same…

Manually, using the NPV formula:
NPV = C0 + C1/(1+r)^1 + C2/(1+r)^2 + C3/(1+r)^3 + …. + Cn/(1+r)^n

The manual result is stored in RunningTotal
With rate r = 0.04
and period n = 10

Here is my relevant code:

EDIT: Do I have OBOB somewhere?

    YearCashOutFlow = CDbl(TxtAnnualCashOut.Text)
    YearCashInFlow = CDbl(TxtTotalCostSave.Text)

    YearCount = 1

    PAmount = -1 * (CDbl(TxtPartsCost.Text) + CDbl(TxtInstallCost.Text))
    RunningTotal = PAmount
    YearNPValue = PAmount
    AnnualRateIncrease = CDbl(TxtUtilRateInc.Text)

    While AnnualRateIncrease > 1
        AnnualRateIncrease = AnnualRateIncrease / 100
    End While
    AnnualRateIncrease = 1 + AnnualRateIncrease

    ' ZERO YEAR ENTRIES
    ListBoxNPV.Items.Add(Format(PAmount, "currency"))
    ListBoxCostSave.Items.Add("$0.00")
    ListBoxIRR.Items.Add("-100")
    ListBoxNPVCum.Items.Add(Format(PAmount, "currency"))
    CashFlows(0) = PAmount
    ''''

    Do While YearCount <= CInt(TxtLifeOfProject.Text)
        ReDim Preserve CashFlows(YearCount)

        CashFlows(YearCount) = Math.Round(YearCashInFlow - YearCashOutFlow, 2)
        If CashFlows(YearCount) > 0 Then OnePos = True


        YearNPValue = CashFlows(YearCount) / (1 + DiscountRate) ^ YearCount
        RunningTotal = RunningTotal + YearNPValue

        ListBoxNPVCum.Items.Add(Format(Math.Round(RunningTotal, 2), "currency"))
        ListBoxCostSave.Items.Add(Format(YearCashInFlow, "currency"))

        If OnePos Then
            ListBoxIRR.Items.Add((IRR(CashFlows, 0.1)).ToString)
            ListBoxNPV.Items.Add(Format(NPV(DiscountRate, CashFlows), "currency"))
        Else
            ListBoxIRR.Items.Add("-100")
            ListBoxNPV.Items.Add(Format(RunningTotal, "currency"))
        End If

        YearCount = YearCount + 1
        YearCashInFlow = AnnualRateIncrease * YearCashInFlow
    Loop

EDIT: Using the following values:
Discount Rate = 4%
Life of Project = 10 years
Cash Flow 0 = -78110.00
Cash Flow 1 = 28963.23
Cash Flow 2 = 30701.06
Cash Flow 3 = 32543.12
Cash Flow 4 = 34495.71
Cash Flow 5 = 36565.45
Cash Flow 6 = 38759.38
Cash Flow 7 = 41084.94
Cash Flow 8 = 43550.03
Cash Flow 9 = 46163.04
Cash Flow 10 = 48932.82

Using the calculator at http://www.investopedia.com/calculator/NetPresentValue.aspx
And following the manual “textbook” formula I arrive at the same result:

Net Present Value: $225,761.70

I cannot seem to get NPV() to replicate this result… it spits out $217,078.59

I iterate it manually using the example same value… so they must be using a different function than I am…

The MSDN page example clearly states that the initial expense should be included in the cash flows list.

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1 Answer

  1. Editorial Team

    Normally you wouldn’t include the first cashflow in the Visual Basic NPV() function (or at least we don’t in the leasing world). You would discount all but the first cash flow, then add that first cash flow amount onto your Net Present Value. Here’s an example of what I’ve done before in a calculation engine (minus error checking to simplify the example):

    Dim leaseRentalsDiscounted As Double = 0.0

Dim rebatedCashFlows As IEnumerable(Of LeasePayment) = GetLeaseRentalsPaymentStream()

Dim firstFlow As LeasePayment = rebatedCashFlows(0)

Dim doubleStream As Double() = PaymentToDoubleArray(rebatedCashFlows.Skip(1))

If doubleStream.Length > 0 Then
    Dim rate As Decimal = New Decimal(Me.Lease.DiscountRate / 100.0 / 12.0)
    leaseRentalsDiscounted = NPV(rate, doubleStream)
End If

leaseRentalsDiscounted += firstFlow.Amount

Return leaseRentalsDiscounted

    That could account for your 5% — I know I’ve run into an issue like this before. To me, in the manual NPV formula you posted, C0 doesn’t need to be in the stream that is discounted, so that’s why I don’t include it in the NPV() function.

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