Question

i want to calculate the NPV ( Net Present Value ) using PHP.

Below is the detail which i have.

    discount rate : 15%

    Cash Flow Values per Year:

    Year 1: 110000
    Year 2: 122000 
    Year 3: 135200
    Year 4: 149720
    Year 5: 157706
    Year 6: 166091

NPV Formula which i am using.

NPV = sum of all years( (Ci)/(1+r)^i)

i=1,2,3,4,5,...
Ci= Cash Flow for year i
r=rate of discount

Any help.

Thanks In advance

Avinash

Answer 1

You would calculate the NPV of each year using the following formula:
(value) / ((1 + 0.15) ^ (year)) then sum all the results to get your final NPV – where ^ means to the power of.

So for year two it would be: 122000 / ((1.15)^ 2).

At the current point in time the power ^ value would be 0