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If you make an investment and the returns are paid to you periodically, you can use NPV function to calculate NPV of the investment. What if the returns are paid to you not periodically? You will need XNPV function. You can think "X" in XNPV as "special". So XNPV function is a special type of NPV function. Suppose you make an investment on January 1, 2020, and the returns are paid to you on specific days, like below. XNPV function can be used. The formula is: =XNPV(B1, B4:B7, A4:A7) B1 is the rate, B4:B7 are the cash flows, and A4:A7 are the dates you receive the cash.

NPV function calculates the net present value of a future positive or negative cash flows. For example, suppose you will receive an income of $100 one year later, how much does it worth today? $100 received one year later worth less than $100 received today. Because if you have $100 in hand at this moment and invest it, suppose the return rate is 5%, then it will grow into $105 one year later. Next, we will show you how to calculate the net prevent value of $100 received one year later. Let the net prevent value of $100 received one year later be X, and suppose the investment return rate is 5%. Then X*(1+0.05)=$100 So, X=$100/(1+0.05)=$95.24 It means that if you have $95.25 in hand right now and invest it with 5% investment return, it will grow into $100 one year later. Therefore, $100 received one year later is worth $95.24 today. That is to say, the net prevent value (NPV) of $100 received one year later is $95.24. If you use NPV function, the formula is: =NPV(0.05, 100) What is the ...