Exceltemplates.org – Large scale projects for business need to be well-calculated. This makes sure that the plan you are about to invest in will not leave you out of cash at the end. The Net Present Value Calculator is the tool to help you calculate the likeliness of your plan. The value of your business in the long run and today will be different therefore if there is a chance that the NPV is negative the plan is best discontinued. Therefore the calculation should best result positive for it to continue and work out in the future.
Net present value is similar to present value of cash flow. The net present value focuses on calculating the profitability and not merely the cash flow. However the Net Present Value is most effective in determining the future worth of your business from today by comparing the dollars that are invested in it. In ten years for instance a dollar will value differently to a dollar today.
How to Use Net Present Value Calculator for Excel
There are three results that will be presented for you by the Net Present Value Calculator: the Project Net Present Value, the difference and the percentage. The percentage is the aforementioned indicator telling you whether or not the project that you have planned will bring you to a better place. To see the results, enter the discount rate, the period of years and the initial cash flow on the top part of the table. At the table below, fill in the cash flow per year according to the period of years. Other than paying attention to the negative or positive results of the percentage, it is also important to note the period and compare it to the several projects that you have.
Using Microsoft Excel to simplify your spreadsheet tasks is not as difficult as you think. I learned how to use it in less than 24 hours and rely on internet to find the solution if I got stuck. I am not an Excel expert, but here are all useful spreadsheets I have collected and created.
