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NPV using tables

NPV using tables - Microsoft Excel Tutorial

From the course: Investment Evaluation

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NPV using tables

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- Most experts will calculate NPV using a software package. For starters though, let's start with something a little bit different. Remember your takeaway: NPV is DCF calculations, less the overhead cost. If we don't have a software package, we can calculate NPV quite easily using net present value tables and annuity tables. These can be found in the exercise files. Basically, these net present value tables tell us the present value for one dollar at a certain discount rate at X amount of years down the road. The annuity table tells you the present value of an ordinary annuity at a certain discount rate at X amount of years down the road. They're limited by the number of significant figures, so they're not quite as accurate as financial software, but close enough for our purposes. In case you're wondering, you can think of an annuity as the reverse of present value. For example, take one dollar. If you're looking at a present value table, the one dollar would be discounted further and…

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