Value a series of future cash flows in today's money.
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=NPV(B1, B3:B12)+B2NPV discounts the future cash flows in the range by the rate in B1. Because NPV assumes the first value is one period away, add the initial outlay (B2, at time zero) outside the function.
=NPV(10%, 3000, 4200, 6800)-10000→1,188Positive NPV — the project adds value.
Internal rate of return
=IRR(B2:B12)IRR finds the rate where NPV = 0.
NPV discounts every value by at least one period. A time-zero outlay shouldn't be discounted, so include it outside NPV.
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