Net Present Value Calculations Exercise

Table of Contents
NPV
NPV (Mid-period)
XNPV
XNPV (Mid-period)

Notes
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NPV Calculation
All Amounts Denominated in $MM Unless Otherwise Stated

Calculate the Net Present Value (NPV) assuming annual cash flows of $15,000 per year and a discount rate of 10%. Use the NPV

Year 2021 2022 2023 2024 2025

Cash Flow $15,000 $15,000 $15,000 $15,000 $15,000
Discount Rate 10%

Net Present Value (NPV) $92,169

1 0.909 15,000 $13,636

2 0.826 15,000 $12,397
3 0.751 15,000 $11,270
4 0.683 15,000 $10,245
5 0.621 15,000 $9,314
6 0.564 15,000 $8,467
7 0.513 15,000 $7,697
8 0.467 15,000 $6,998
9 0.424 15,000 $6,361
10 0.386 15,000 $5,783
$92,169
count rate of 10%. Use the NPV function.

2026 2027 2028 2029 2030

$15,000 $15,000 $15,000 $15,000 $15,000
© Corporate Finance Institute. All rights reserved.

NPV Calculation (Mid-period Discounting)

All Amounts Denominated in $MM Unless Otherwise Stated

Calculate the Net Present Value (NPV) assuming annual cash flows of $15,000 per year and a discount rate of 10%.
Calculate NPV with and without mid-period discounting.

Year 2021 2022 2023 2024 2025

Cash Flow $15,000 $15,000 $15,000 $15,000 $15,000
Discount Rate 10%

NPV $92,169
NPV (Mid-Period) $96,667
count rate of 10%.

2026 2027 2028 2029 2030

$15,000 $15,000 $15,000 $15,000 $15,000
© Corporate Finance Institute. All rights reserved.

XNPV Calculation
All Amounts Denominated in $MM Unless Otherwise Stated

Calculate the Net Present Value (NPV) assuming annual cash flows of $15,000 per year and a discount rate of 10%. Use the XNPV fu

Year 1/1/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024

Cash Flow $0 $15,000 $15,000 $15,000 $15,000
Discount Rate 10%

XNPV $92,173

0
1 0.9090909091 15000 13636.363636
2 0.826446281 15000 12396.694215
3 0.7513148009 15000 11269.722014
4 0.6830134554 15000 10245.20183
5 0.6209213231 15000 9313.8198459
6 0.5644739301 15000 8467.1089508
7 0.5131581182 15000 7697.3717735
8 0.4665073802 15000 6997.6107031
9 0.4240976184 15000 6361.4642756
10 0.3855432894 15000 5783.1493414
92168.506586
count rate of 10%. Use the XNPV function.

12/31/2025 12/31/2026 12/31/2027 12/31/2028 12/31/2029 12/31/2030

$15,000 $15,000 $15,000 $15,000 $15,000 $15,000
© Corporate Finance Institute. All rights reserved.

XNPV Calculation (Mid-period Discounting)

All Amounts Denominated in $MM Unless Otherwise Stated

Calculate the Net Present Value (NPV) assuming annual cash flows of $15,000 per year and a discount rate of 10%. Use the XNPV fu
Calculate NPV with and without mid-period discounting.

Year 1/1/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024

Mid-Period 1/1/2021 7/2/2021 7/1/2022 7/1/2023 7/1/2024
Cash Flow $0 $15,000 $15,000 $15,000 $15,000
Discount Rate 10%

XNPV $92,173
XNPV (Mid-Period) $96,681
NPV (Mid-Period)
count rate of 10%. Use the XNPV function.

12/31/2025 12/31/2026 12/31/2027 12/31/2028 12/31/2029 12/31/2030

7/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030
$15,000 $15,000 $15,000 $15,000 $15,000 $15,000