Calculate the Net Present Value (NPV) of future cashflows based on an interest rate.

Net Present Value (NPV) of Future Cashflows

Purpose

The Net Present Value (NPV) function helps you determine the current value of future cashflows, taking into account the time value of money.

Use Cases

• Calculating the current value of investments or projects with future cash inflows and outflows.
• Evaluating the profitability of potential business ventures.

How to Use

1. Enter the cashflows you expect to receive or pay in the future.
2. Specify the interest rate at which you want to discount these cashflows.
3. Click on the calculate button to get the Net Present Value.

Input Values

1. Interest Rate - The annual interest rate used to discount future cashflows. Default unit is percent per year.
2. Cashflow Interval - The time interval at which the cashflows occur (e.g., yearly).
3. Cashflows - Table of cashflows with corresponding amounts.

Output Values

1. Net Present Value - The current value of future cashflows after discounting.

Any other Instruction

• Ensure the cashflows are entered in the correct order and correspond to the specified interval.
• Review the calculated NPV to make informed decisions about investments or projects.

Code Analysis

1. Calculate the rate based on the provided interest rate and cashflow interval.
2. Compute the NPV by discounting each cashflow at the calculated rate and summing them up.

Technical Parameters

• interest_rate, cashflow_interval, cashflows

Return Values

• Net Present Value

Example Expressions

You can use the following expressions to directly evaluate in a non-interactive manner using eval():

npv(interest_rate='5 pct/yr', cashflow_interval='yr', cashflows=pd.DataFrame({'Cashflow': [-40000, 5000, 8000, 12000, 30000]}))
npv(interest_rate='7 pct/yr', cashflow_interval='yr', cashflows=pd.DataFrame({'Cashflow': [-20000, 6000, 10000, 15000, 25000]}))

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