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**NPV**(//investment,cashflows,periods,rate//)

| **NPV** | Computes net present value of an investment. |
| //investment// | A numeric constant or variable containing the initial cost of the investment (a negative number). |
| //cashflows[]// | A single dimensioned DECIMAL array containing the amounts of money paid out and received during discrete accounting periods. |
| //periods[]// | A single dimensioned DECIMAL array containing period numbers identifying the discrete accounting periods in which cash flows occurred. |
| //Rate// | A numeric constant or variable containing the desired //periodic //rate of return. |

**NPV **determines the viability of an investment proposal by calculating the present value of future returns, discounted at the marginal cost of capital minus the cost of the investment (//investment//). The //cashflows //parameter is an array of money paid out and received during the course of the investment. The //periods// parameter is an array which contains the period number in which a corresponding cash flow occurred. The desired periodic rate of return (//rate//) for the investment is also specified. //Investment //should contain a negative number (a cost).

Periodic rate may be calculated as follows:

PeriodicRate = AnnualInterestRate / (PeriodsPerYear * 100)

{{c6h0012.jpg|C6H0012.jpg}}

//Cashflows //and //periods //MUST both be DECIMAL arrays of single dimension and equal size. The last element in the //periods //array MUST contain a zero to terminate the NPV analysis.

**Return Data Type:**     DECIMAL

**Internal Formulas:**

{{npv.jpg|NPV.jpg}}

**Example:**

**CashFlows           DECIMAL(18,2),DIM(1000)**

**CashFlowPeriods     DECIMAL(4),DIM(1000)**

**InvestmentAmount    DECIMAL(18,2)**

**DesiredInterestRate DECIMAL(31,15)**

**NetValue            DECIMAL(18,2)**

**InvestmentTransactions FILE,DRIVER('TOPSPEED'),|**

**            NAME('busmath\!InvestmentTransactions'),PRE(INV),CREATE,THREAD**

**KeyIdPeriodNumber KEY(INVTRN:Id,INVTRN:PeriodNumber),NOCASE,PRIMARY**

**Notes             MEMO(1024)**

**Record            RECORD,PRE()**

**Id                 DECIMAL(8)**

**PeriodNumber       DECIMAL(8)**

**Date               ULONG**

**Type               STRING(20)**

**Amount             DECIMAL(16,2)**

**                  END**

**                       END**

**CODE**

**  CLEAR(CashFlows)                 !initialize queue**

**  CLEAR(CashFlowPeriods)           !initialize queue**

**  CLEAR(InvestmentAmount) **

**  CLEAR(TRANSACTION:RECORD)        !initialize record buffer**

**  DesiredInterestRate = INV:NominalReturnRate / (100 * INV:PeriodsPerYear)**

**  transcnt# = 0**

**  TRANSACTION:Id = INV:Id          !prime record buffer**

**  TRANSACTION:PeriodNumber = 0**

**  SET(TRANSACTION:KeyIdPeriodNumber,TRANSACTION:KeyIdPeriodNumber) !position file**

**  LOOP                                   !loop for all transactions**

**   NEXT(InvestmentTransactions)          !read next record**

**   IF ERRORCODE() OR TRANSACTION:Id NOT = INV:Id  !if no more transactions**

**    BREAK                                         !break from loop**

**   ELSE                                           !else process transaction**

**    transcnt# += 1**

**    CashFlows[transcnt#] = TRANSACTION:Amount**

**    CashFlowPeriods[transcnt#] = TRANSACTION:PeriodNumber**

**   END                       !endelse process transaction**

**  END                        !endloop all transactions **

**  NetValue = NPV(InvestmentAmount,CashFlows,CashFlowPeriods,DesiredInterestRate)**