Can someone please advise me on whether I should use the NPV or XNPV function in Excel to calculate the FMV of cash flows that are not annual (i.e. monthly, quarterly, semi-annual)? All cash flows are expected on the month-end date for each respective period. Thank you in advance!!
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XNPV. Remember to include the initial cash outlay at time 0 within the calculation, as opposed to a NPV calculation in Excel.
Always XNPV, as it takes into account the different timing of cash flows.
Thank you both. For a quarterly cash flow example when using XNPV, should i divide the discount rate by 4 or does the XNPV formula already account for this adjustment?
Thank you!
Not sure if you saw what Kurtis said, but no. As stated XNPV takes into account the different timing of cash flows, so again, no
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