Finance ( NVP )

NPV

• NPV, calculate the benefit of invest in one idea today and the benefit for the next period of times
• Is the rate of return which makes NPV zero

Interest rate (r)

• Captures the opportunity cost of investing in the idea (business)

Essence

• Value is always incremental

Excel

• NPV(rate, value1, [value2], ...)
• rate is the interest rate
• value1 is the first payment in one year in the future
• value 1 can be type as a rage of values A1:A5
• In a real exercise after the NPV you need to add the first payment that is the inversion amount. 

Formula

Properties

• (TVM) Time Value Money = Benefit - Cost
• Has a unit of measurement
• If NVP > 0 then has a obvious benchmark