8

Unfortunately I was taught the lazy way to determine NPV by using Excel's NPV function. Has anyone here built this in Mendix?

asked

Marc Lehane

4 answers

15

The formula that we use on our project is as follows:

Legend: PV = Price N = Rental term i = Interest rate A = 1

Formula:

```
NPV = PV
----------- (divide)
1
[ 1 - -------- + 1 ]
(1+i)N-A
----------- (divide)
i
```

So if:

PV = 1000 N = 36 months i = interest rate per month = 10% / 12 = 0.833% A= 1

Then the NPV calc will look like this:

```
NPV = 1000
-----------------
1
[ 1 - ------------- + 1 ]
(1+0.833%)36-1
-----------------
0.833%
= 1000
--------
1
[ 1 - ------- + 1 ]
1.33704
-------
0.833%
= 1000
--------
[ 1 - 0.747921 + 1 ]
--------
0.833%
= 1000
--------
[ 0.252079 +1 ]
--------
0.833%
= 1000
--------
[ 30.2495 +1 ]
= 1000
--------
[ 31.2495 ]
NPV = 32.00
```

answered

Desmond Chow

0

picture [1]

answered

Jaap Pulleman

0

answered

Jaap Pulleman

0

[2]

answered

Jaap Pulleman