In this short article we'll look at the problem with NPV in Excel, show you where most people go wrong, and we'll also walk through the correct way to use the NPV function in Excel, step-by-step. https://www.propertymetrics.com/blog/2014/09/30/how-not-to-use-npv-in-excel/

The Problem With NPV in Excel

First of all, what's the problem with NPV in Excel? Why do so many people get it wrong? Well, contrary to popular belief, NPV in Excel does not actually calculate the Net Present Value (NPV). Instead, it calculates the present value of a series of cash flows, even or uneven, but it does NOT net out the original cash outflow at time period zero. This original cash outflow actually needs to be manually subtracted out when using the NPV formula in Excel.