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POWhat function does .NET NPV() use? Doesn't match manual calculations
 

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  1. POWhat function does .NET NPV() use? Doesn't match manual calculations
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    <p>I am using the NPV() function in VB.NET to get NPV for a set of cash flows.</p> <p>However, the result of NPV() is not consistent with my results performing the calculation manually (nor the Investopedia NPV calc... which matches my manual results)</p> <p>My correct manual results and the NPV() results are close, within 5%.. but not the same...</p> <p>Manually, using the NPV formula: NPV = C0 + C1/(1+r)^1 + C2/(1+r)^2 + C3/(1+r)^3 + .... + Cn/(1+r)^n</p> <p>The manual result is stored in RunningTotal With rate r = 0.04 and period n = 10</p> <p>Here is my relevant code:</p> <p>EDIT: Do I have OBOB somewhere?</p> <pre><code> YearCashOutFlow = CDbl(TxtAnnualCashOut.Text) YearCashInFlow = CDbl(TxtTotalCostSave.Text) YearCount = 1 PAmount = -1 * (CDbl(TxtPartsCost.Text) + CDbl(TxtInstallCost.Text)) RunningTotal = PAmount YearNPValue = PAmount AnnualRateIncrease = CDbl(TxtUtilRateInc.Text) While AnnualRateIncrease &gt; 1 AnnualRateIncrease = AnnualRateIncrease / 100 End While AnnualRateIncrease = 1 + AnnualRateIncrease ' ZERO YEAR ENTRIES ListBoxNPV.Items.Add(Format(PAmount, "currency")) ListBoxCostSave.Items.Add("$0.00") ListBoxIRR.Items.Add("-100") ListBoxNPVCum.Items.Add(Format(PAmount, "currency")) CashFlows(0) = PAmount '''' Do While YearCount &lt;= CInt(TxtLifeOfProject.Text) ReDim Preserve CashFlows(YearCount) CashFlows(YearCount) = Math.Round(YearCashInFlow - YearCashOutFlow, 2) If CashFlows(YearCount) &gt; 0 Then OnePos = True YearNPValue = CashFlows(YearCount) / (1 + DiscountRate) ^ YearCount RunningTotal = RunningTotal + YearNPValue ListBoxNPVCum.Items.Add(Format(Math.Round(RunningTotal, 2), "currency")) ListBoxCostSave.Items.Add(Format(YearCashInFlow, "currency")) If OnePos Then ListBoxIRR.Items.Add((IRR(CashFlows, 0.1)).ToString) ListBoxNPV.Items.Add(Format(NPV(DiscountRate, CashFlows), "currency")) Else ListBoxIRR.Items.Add("-100") ListBoxNPV.Items.Add(Format(RunningTotal, "currency")) End If YearCount = YearCount + 1 YearCashInFlow = AnnualRateIncrease * YearCashInFlow Loop </code></pre> <p>EDIT: Using the following values: Discount Rate = 4% Life of Project = 10 years Cash Flow 0 = -78110.00 Cash Flow 1 = 28963.23 Cash Flow 2 = 30701.06 Cash Flow 3 = 32543.12 Cash Flow 4 = 34495.71 Cash Flow 5 = 36565.45 Cash Flow 6 = 38759.38 Cash Flow 7 = 41084.94 Cash Flow 8 = 43550.03 Cash Flow 9 = 46163.04 Cash Flow 10 = 48932.82</p> <p>Using the calculator at <a href="http://www.investopedia.com/calculator/NetPresentValue.aspx" rel="nofollow noreferrer">http://www.investopedia.com/calculator/NetPresentValue.aspx</a> And following the manual "textbook" formula I arrive at the same result:</p> <p>Net Present Value: $225,761.70</p> <p>I cannot seem to get NPV() to replicate this result... it spits out $217,078.59</p> <p>I iterate it manually using the example same value... so they must be using a different function than I am...</p> <p>The MSDN page example clearly states that the initial expense should be included in the cash flows list.</p>
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    1. CONVP? Which assembly is this function defined in. I cannot see you referencing it in the code example provided.
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    2. COMicrosoft.Visualbasic http://msdn.microsoft.com/en-us/library/microsoft.visualbasic.financial.npv.aspx
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    3. COSee my comment on my answer below -- I got the VB `NPV()` function working for your example.
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      1. USCᴏʀʏ
 

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