Teniendo en cuenta que el valor real del dinero cambia con el tiempo. 1. Functionally, the IRR is. Formula =NPV (rate,value1, [value2],…) The NPV function uses the following arguments: Rate (required argument) – This is the rate of discount over the length of the period. Figure 16. The net present value function is “=npv(rate, value 1, value 2,. Here we present the theoretical basis of our NPV and PPV calculator – this is how we can calculate the Negative Predictive Value from sensitivity and specificity. You can use this formula to calculate NPV: NPV = [cash flow/ (1-i)^t] - initial investment. This is due to the sale of the office building in year 3. NPV = [cash flow / (1+i)^t] - initial investment. It calculates the current value of future cash flows associated with the acquisition and subtracts the initial. 81 right now. Calculates the net present value of an investment based on a series of periodic cash flows and a discount rate. i = discount rate (rate of return)Here's the formula for calculating NPV: NPV = Σ [CFt / (1 + r)^t] - I₀. 16. However, it is difficult to agree on the assumptions that will predict an accurate perpetual growth rate. NPV = ∑Cashflow / (1+r)t – Initial Investment. Secondly, use the corresponding formula in the C11 cell. I am trying to calculate the net present value (NPV), internal rate of return (IRR) and the payback (PB) time for a varying number of projects in order to evaluate, which investment project offers the best return. NPV is used by organizations in financial planning to find the profitability of an investment. . Net Present Value is the present value of a future stream of free cash flows, discounted and summed up to their current worth. Whenever the net present value exceeds the price, the project has created value for the company and its shareholders. Now, let's walk through the steps to calculate NPV in Excel for break-even analysis: 1. Learn how to use the IRR formula. The function will look like this on screen: NPV(12,-800,{100,200,300,400,500}) Press Enter to get the solution and you'll see that the NPV is $200. t refers to time (usually number of years). But your choice of interest rate can change things! If you use our NPV calculator to determine the NPV for each of these projects, you will discover that the NPV of project 1 is equal to $481. NPV = $24,226. Here are some tips and tricks to help you get the most out of the NPV formula in Google Sheets: Remember that the discount rate should be expressed as a decimal. Net Present Value is the present value of all cash inflows and outflows of a project over a period of time. Where R 1 = Net Cash flow in period one, R 2 = Net Cash flow in period two, R 3 = Net Cash flow in period three, and i = the discount rate Assume that a company buys a machine for $1000, which generates cash flows of $600 in year one, $550 in year two, $400 in year three, and $100 in year four. Those future cash flows must be discounted because the money earned in the future is worth less. Based on the above, the XNPV formula produces a value of $772,830. ) You can input the interest rate for a project into the rate part of the formula and the values represent the future cash flows for a project in. The aim of this article is to help provide an understanding of sensitivity, specificity, positive predictive value (PPV) and negative predictive value (NPV) in an intuitive and comprehensible format. Check out our blog post to learn more about how to use the NPV formula in Google Sheets. In this tutorial, you will learn to calculate Net Present Value, or NPV, in Excel. Although NPV carries the idea of "net", as in the present value of future cash flows. Steps: To calculate the Discount Rate, in the first place, select the blank cell below the heading Discount Rate and type the formula: = ( (C5/C6)^ (1/C7))-1. Each cash flow, specified as a value, occurs at the end of a period. 85) as of 1/1/2023. NPV calculation formula : For calculating NPV value using formula, you must already know the estimated value of discount rate (r) , all cash flow (both positive and negative) and the total initial invesment made by the company. Formula for a Single Cash Flow Investment. 68 is how much managers are saving by doing the project rather than investing in the alternative. Try it! If you need to use an equation, add or write it in Word. 1. The function is available in all versions Excel 365, Excel 2019, Excel 2016, Excel 2013, Excel 2010 and Excel 2007. Net present value does not take into account the size of the project. Note that “n” is the periodic cash flow. Enter the present value formula. ) Determine the net present value using cash flows that occur at regular intervals, such as monthly or annually. Calculate the net present value ( NPV) of a series of future cash flows. NPV = Cash flow / (1 + i)t – initial investment. 10% to the Free Cash Flow in the. Step 3 – Calculate NPV. Here, I have taken the following dataset to explain this article. The sum of all these discounted. , $242. Use your finger, stylus, or mouse to write your equation. Timo on Feb 09, 2022 @Evandro and @Nina - You need to be careful in defining the discount rate: The discount rate is the "divisor" of the PV-formula, hence the discount rate's formula is 1/(1+r)^t. The following formula demonstrates how NPV and IRR are related: NPV(IRR(A2:A7),A2:A7) equals 1. The net present value of the cash flows of a bond added to. All of the cash flows are discounted back to their present value to be compared. The primary difference between PV and NPV is that PV allows cash flows to begin either at the end or at the beginning of the period. ; This formula doesn’t consider the time frame. e. The discounted cash flow formula uses a cash flow forecast for future years, discounted back to the equivalent value if received in today’s dollars, then sums the discounted value for every year projected. it is 14% for that investment. Click OK. It will include an Insert formula button. But It is a must to have an actual set of dates. 10% to the Free Cash Flow in the final. Net Present Value. The NPV function in Excel is simply NPV, and the full formula requirement is: =NPV(discount rate, future cash flow) + initial investment. . The discount rate for the investment is 5% and the time period for the investment is five years. The NPV formula is a way of calculating the Net Present Value (NPV) of a series of cash flows based on a specified discount rate. Here's the formula to use to calculate WACC: Weighted average cost of capital = (percentage of capital that is equity x cost of equity) + [(percentage of capital that is debt x cost of debt) x (1 - tax rate)]NPV calculation formula : For calculating NPV value using formula, you must already know the estimated value of discount rate (r) , all cash flow (both positive and negative) and the total initial invesment made by the company. If the first cash flow occurs at the start of the first period, the first value must be added to the NPV. Next, we sum these values. The steps are given below. where: PVPV – Present value of money; cash flowcash flow – Amount of money you will get in the future; rr – Discount rate (interest rate used in cash flow analysis); and. The total if you included the $1,000 on day 1 is. Accounting Rate of Return - ARR: The accounting rate of return (ARR) is the amount of profit, or return, an individual can expect based on an investment made. Present value (PV) is the. Net Present Value is the cumulative sum of PV. The value of the bottom “right” is always false. Step 1: Enter the discount rate in a cell. Second, the NPV method provides a clear decision criterion. The following formula shows how to calculate NPV: Advertisement. The present value calculator formula in B9 is: =PV (B2/B7, B3*B7, B4, B5, B6) Assuming you make a series of $500 payments at the beginning of each quarter for 3 years with a 7% annual interest rate, set up the source data as shown in the image below. The net present value (NPV) allows you to evaluate future cash flows based on the present value of money. Using the TI-84 Plus CE calculator, one can easily calculate the NPV by inputting these values. 33 pounds. Net present value (NPV) is used to calculate the current value of a future stream of payments from a company, project, or investment. Use PV = FV / (1+i)t to find present and future values. The net present value of the investment is the sum of all discounted cash flows: NPV = (-1,000,000) + 47,619 + 46,259 + 44,937 + 43,653 + 42,406 + 41,194 + 746,215 = 12,283. You'd then subtract the cash flows of the bond used to fund the project. When the NPV is positive, an investment's expected. The NPV shows the present value of all future cash flows, both negative and positive, by using the discount rate as its basis. The formula to calculate NPV is: NPV = R t / (1+i) t - C. In order determine this, add the present values for all the investment period’s time intervals and then subtract the investment sum. If a $100 investment has an annual payback of. You will discount them using the given cost of capital of 7%. To calculate NPV using Excel, you would begin by placing each year’s expected cash flows in a sheet, as in row 5 in Figure 16. Net present value is a calculation which adjusts the value of cash that will be earned in the future for the time value of. An investment with a 15 year term may show a higher NPV than an investment with a 4 year term. Step 1 – Decide on (or calculate) a discount rate. 2. Formulas always start with the equal sign to tell Excel to perform a calculation. The initial investment (-50,000, recorded as a negative value because it is an. Here, the NPV function is used for calculating the net present value. Net present value (NPV) is the present value of all future cash flows of a project. Esta metodología es muy utilizada para la evaluación de proyectos. Note: The initial investment is one kind of outflow of cash. It’s easiest to calculate NPV with a spreadsheet or calculator. Hay dos métodos para calcular el npv en la hoja de Excel. If you apply the net present value formula for each time period, you’d end up with $25,663. NPV(0. 5 million. Net the cash outflows and inflows by adding them. Present value tells you the current worth of a future sum of money. Calculating NPV of the cash inflow. YIELDDISC. Future value: B5. #1 – Time Value of Money. DC2= $3306. The NPV function can also be used to calculate the present value of an individual cash flow. t = number of time periods. 4. In other words, it’s used to evaluate the amount of money that an investment will generate compared with the cost. The cash flows consist of a mixture of costs and benefits occurring over time. 4. ] – X o. Net present value (NPV) adds up the present values of all future cashflows to bring them to a single point in present. NPV function (rate, value1, [value2],. ). The discount rate element. The following is the formula for calculating the net present value for an investment or project: (Cash flows)/ (1+r)i = net present value. Solution: Calculation of WACC can be done as follows, WACC formula = We*Ce+Wd*Cd* (1-tax rate) = 20*35+80*15* (1-32) WACC = 15. 91. The net present value of an investment is the difference between the current value of future cash flows and the cost of launching the project. Example. You can make data-driven decisions on investing by using the NPV function in google sheets to see whether an investment is profitable. What is Net Present Value (NPV)? Definition: Net present value, NPV, is a capital budgeting formula that calculates the difference between the present value of the cash inflows and. The positive NPV indicates a profitable investment. The positive and negative predictive values ( PPV and NPV respectively) are the proportions of positive and negative results in statistics and diagnostic tests that are true positive and true negative results, respectively. Internal Rate of Return (IRR) = (Future Value ÷ Present Value) ^ (1 ÷ Number of Periods) – 1. NPV = Cash flow / (1 + i)^t – initial investment. Syntax NPV. DC3= $42,074. To calculate the NPV in this scenario, you would use the NPV formula mentioned. 18. To use a built-in formula, select Design > Equation. The perpetuity growth model is preferred among academics as there is a mathematical theory behind it. NPV is similar to the PV function (present value). Year 3: £60,000 X 0. This formula describes the difference between the project’s cash value now and in the future. The equation for calculating net present value is as follows:Net present value (NPV) is a calculation that takes a future stream of cash flows and discounts them back into the present day. Each new NPV calculation and discount rate can only provide insight about the net present value and risk at a single point in time. PV is an Excel financial function that returns the present value of an annuity, loan or investment based on a constant interest rate. We apply the expected growth rate of 2. The function automatically assumes all the time periods are equal. It considers the interest rate, which is generally equivalent to the inflation rate, Hence, the real value of money now at each year of operation is considered. You can click on each cell as you fill in the formula or manually type in each cell number. This would be considered a geometric series where (1+g)/ (1+r) is the common ratio. In this case, i = required return or discount rate and t = number of time periods. Advantages and Disadvantages of the NPV. NPV equals the sum of present values of all cash flows (inflows and outflows) in a project. In this formula, cash flows refer to the flow during a particular period or a future payment. Net Present Value Rule: The net present value rule, a logical outgrowth of net present value theory, refers to the idea that company managers or investors should only invest in projects or engage. However, that’s all relatively abstract, so if you. Another way of thinking about WACC is that it is the required rate an investor needs in order to consider investing in the business. Because of this assumption, the formula for perpetuity with growth can be used. NPV = Cash Flow n / (1 + Discount Rate) n. The above NPV calculation of -$44,845 incorrectly includes the $515,000 initial cash outlay in the series of cash flows. The discount rate is the rate for one period, assumed to be annual. The NPV function returns the result as $34. Viewed 460 times. 13. Using NPV Function to Calculate Present Value of Growing Annuity in Excel. Discount Rate = T * [ (Future Cash Flow / Present Value) 1/t*n – 1] Discount Rate = 2 * [ ($10,000 / $7,600) 1/2*4 – 1] Discount Rate = 6. Present value (PV) is the current value of a future sum of money or stream of cash flow given a specified rate of return. Year 1: £40,000 X 0. Corporate Finance For Dummies. NPV Formula. ]The Excel “PV” function can only be used if the stream of cash flows remain constant (and the interest rate is fixed). XNPV (rate, values, dates) The XNPV function syntax has the following arguments: Rate Required. . Click on the cell where you want Excel Net Present Value Calculation to be performed. The initial investment (-50,000, recorded as a negative value because it is an. In the example above, the formula entered into the. the purchase. r is the discount rate (interest rate used to account for the time value of money) t is the time period (in years) I₀ is the initial investment cost. The net present value (NPV) formula is used to evaluate the profitability of an investment by considering the time value of money. By utilizing Excel's built-in functions, users can calculate NPV in a user-friendly manner, considering factors such as cash flows, discount rates, risk, and inflation. This usually denotes a profitable investment or endeavor. The formula used for the calculation of the net present value of a business is: =NPV(B2,B3:B8) The Net Present Value of the business calculated through Excel NPV function is. Usually, these capital investment projects are large in terms of scope and money, such as purchasing an expensive set of assembly-line equipment or constructing a new building. NPV formula for a project with multiple cash flows and a longer duration. 1,C2)+C3. The correct NPV formula in Excel uses the NPV function to calculate the present value of a series of future cash flows and subtracts the initial investment. Then subtract the amount of the. Although NPV carries the idea of "net", as in the present value of future cash flows. The NPV, or Net Present Value, is the present value, or actual value, of a future flow of funds. NPV is similar to the PV function (present value). values: The series of cash flows from the investment. This formula can be simplified by multiplying it by (1+r)/ (1+r), which is to multiply it by 1. To do that, we will use the NPV function. Unlike the variable NPV cash flow values, PV cash flows must be constant throughout the investment. In the program, using the NPV function. Pengertian NPV. Note how year 3 has a cash flow of $540,000. The Difference Between DCF and NPV. Description Calculates the net present value of an investment by using a discount rate and a series of future payments (negative values) and income (positive values). Third, the discount rate used to discount. 33 or 84 units, which need to be sold. NPV = ∑Cashflow / (1+r)t – Initial Investment. Net Present Value Rule: The net present value rule, a logical outgrowth of net present value theory, refers to the idea that company managers or investors should only invest in projects or engage. n= life of the project. NPV is a key tool in financial decision-making. NPV = (Today's value of the expected future cash flows) - (Today's value of invested cash) Broken down, each period's after-tax cash flow at time t is discounted by some rate, r. The formula for the discounted sum of all cash flows can be rewritten as. Knowing the net present value can help calculate the return on investment for a particular investment. The formula to calculate NPV is: NPV = Σ (CFt / (1 + r)^t) - C. If you struggle with summation notation then you can also write out the Net. 3. For example, project X requires an initial investment of $100 (cell B5). The present value (PV) determines how much future money is worth today. In the box beside the words "Or select a category," click the drop-down menu and select Financial. Regular NPV formula: =NPV(discount rate, series of cash flows) This formula assumes that all cash flows received are spread over equal time periods, whether years, quarters, months, or otherwise. Next, you can complete the net present value analysis. You will need to follow through with the next step in order to calculate the present value based on your inputs. Step 4 – Lastly, interpret your results. He's known as one of the most successful investors of all time. The NPV is fundamental to understanding the concept of money's time value. Once you have the three items listed above, you can calculate Net Present Value in Excel. The discount rate is an interest rate used to discount future cash flows for a financial instrument. =NPV (0. Net Present Value Criterion. Since it is positive, based on the NPV rule, the project should be undertaken. The steps are below. However, that’s all relatively abstract, so if you. But you know that this future money is worth less than today’s money, so you want to get a more accurate picture by using the Net Present Value Calculation. Annuity type: B6. XNPV. Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. Then, the XNPV function returns the NPV of the cash flows as of the first listed date. Step 2: Enter the cash flows in the series (In consecutive cells). 4. The array of values and dates must be equal in length since the purpose of. NPV = F / [ (1 + i)^n] In this formula, "F" is future cash flows, "i" is the interest rate and "n" is the number of financial periods until cash flow occurs. The NPV formula of a short-term investment is shown below which is the same exact algorithm that we use in this NPV calculator. Step 3: Insert the PV. Value 1 = -$100,000. To calculate NPV using the formula, you will calculate the present value of the cash flow from year 1, 2, and 3. Key Takeaways. 0. try this instead: 100 100 2600 NPV(. Rent is a classic example of an annuity due because it’s paid at the beginning of each month. The bigger the NPV the better the project is compared to the alternative. Values represent cash flows and be correspond to dates . , (EPI) projects unit sales for a new device as follows: Year Unit Sales 1 87,500 2 105,000 3 119,000 4 108,000 5 92,000 Production of the device will require $1,000,000 in net working capital to start and additional net working capital investments each year equal to 9 percent of the projected. NPV is a common metric used in financial analysis and accounting; examples include the calculation of capital expenditure or depreciation. First, we calculate the present value (pv) of each cash flow. =XNPV (rate, values, dates) rate: The discount rate applied to the series of cash flows. 1 is the discount rate. Select the appropriate formula: In a cell, use the NPV formula, specifying the discount rate and range of cash flows. Evaluate the NPV: The calculated NPV will represent the present value of the future cash flows in. Important points to remember: Ensure all cash flows are relevant to the project’s initial cost. Companies must weigh the benefits of adding projects versus the benefits of holding onto capital. One way to calculate Net Present Value in Excel is to use NPV to get the present value of all expected cash flows, then subtract the initial investment. NPV = $24,226. However, if the payments are not even, the formula is a little more complicated because we need to calculate the present. In Excel, there is an NPV function that can be usedto easily calculate the net present value of a series of cash flows. Keep in mind that money is always worth more today than in the future. At the end of the year, the company will. Then you need a good understanding of net present value (NPV). Co= cash outflow. Discount future cash flows using npv formula: DC1 = $4545. The IRR and NPV (Net Present Value) are closely linked to one another, as the rate of return calculated by IRR is the interest rate corresponding to a 0 NPV. Please Note: IRR (internal rate of return) is the interest rate at which the net present value of the cash flows is equal to zero. The Net Present Value (NPV) formula is a different but related formula that takes PV further. The primary difference between PV and NPV is that PV allows cash flows to begin either at the end or at the beginning of the period. 66. NPV = $63,116. This means that by choosing to. These three possibilities of NPV metric are briefly explained below:. NPV function (rate, value1, [value2],. The formula to calculate NPV is: NPV = R t / (1+i) t - C. How to Calculate Net Present Value (NPV) in Google Sheets. The Purpose of the Internal Rate of Return . Hence, the net present value (NPV) of Project A is,The IRR function below calculates the internal rate of return of project A. Second, we must subtract the discounted cash flows from the initial cost figure in order to obtain the. If the NPV is less than zero, you shouldn't invest in the project. . By using a discount rate and future cash flows at a predetermined rate, the NPV formula assists in assessing if the initial investment is worth it or not. r= discount rate or the cost of capital. Use the NPV formula in Excel, referencing the discount rate and cash inflows, to calculate the net present value. PV=cash flow / (1+ r)^n. In this case, i = required return or discount rate and t = number of time periods. First I think that the top value (numerator) is always a positive value and the bottom “left” value always matches the top value. Step 3. But guess what?The formula for the NPV in this case is therefore: NPV = (C1/(1 + r)^t) – I NPV = (15,000/(1 + 0. ) as used for the number of periods, n. Because of its simplicity, NPV is a useful tool to determine whether a project or investment will result in a net profit or a loss. Step 3 - Apply the NPV function from Excel. This guide will cover the syntax, examples, tips and tricks, common mistakes, troubleshooting, and related formulae for the NPV function in Google Sheets. In this formula, i represents the required return or discount rate for the investment while t equals the number of time. The short video below explains the concept of net present value and illustrates how it is calculated. There are several versions of the ROI formula. ∑t=0∞ 200 1. Step 2: Determine the appropriate discount rate based on the risk and return expectations. A simple example of Net Present Value (NPV) There are essentially three steps to calculating an NPV (and the first two can be done in either order) Step 1 – decide on (or calculate) a discount rate. You can see in the formula that the discount rate is divided by 12, given the monthly payments. The formula to calculate NPV is the sum of [Total cash flow for the year/(1+Discount Rate)n] where n is equal to the number of years. Step 3: Apply the discount rate to each cash flow by dividing it by (1 + r. Net Present Value Formula. 2. The reason for this difference is that XNPV recognizes that the time period between the start date and first cash flow is only 6 months, while the NPV function treats it as a full-time period. Net present value (NPV) is a number investors calculate to determine the profitability of a proposed project. The NPV formula can be very useful for financial analysis and financial modeling when determining the value of an investment (a company, a project, a cost-saving initiative, etc. You would need to input the variables, and the calculator will calculate the final result in no time. It contains the Period, monthly Cashflow, and Discount Rate. In Excel, there is an NPV function that can be used to easily calculate the net present value of a series of cash flows. To calculate the NPV, we will use the formula below: The NPV formula is based on future cash flows. (In other words it is $18. The first date indicates the beginning of the. Menu. An RoR that doesn’t specifically mention time is assumed to be over a one-year period, and the return is known as annual return. Step 1: Set a discount rate in a cell. NPV Tips & Tricks. Next, you click on fx and type “NPV” in the “Search for a function” section. What is the NPV Formula? The NPV formula is a way of calculating the Net Present Value (NPV) of a series of cash flows based on a specified discount rate. Step 2. r is the discount rate. Click the blank cell to the right of your desired calculation (in this case, C7) and enter the PV formula: = PV (rate, nper, pmt, [fv]). NPV = Cash flow / (1 + i)t – initial investment. First, we must discount (i. Formula For the Net Present Value is given below: NPV = ∑ (CFn / (1 + i)n) – Initial Investment. 0. 18. NPV function (rate, value1, [value2],. Calculate the net present value ( NPV) of a series of future cash flows. [1] The PPV and NPV describe the performance of a diagnostic test or other statistical measure. 1 t. cash flow per year. If the NPV is negative, the project is. The net present value of a future cash flow equals the cash flow amount discounted to the present date. Formula for the Discount Factor. Finalize the valuation of your perpetuity. Then, subtract the cash outflows. NPV is the current value of the sum of outflows and inflows of an investment divided by the discount. The difference between the two is that while PV represents the present value of a sum of money or cash flow, NPV represents the net of all cash inflows and all cash outflows, similar to how the net income of. 2. Calculating NPV of the cash inflow. However, that’s all relatively abstract, so if you. i = The discounted rate or return that could be made in alternative investments. In our example, we would probably consider making the investment of $14,000 as it has the potential to return a surplus of $563. 08,200,250,300) NPV (A2,A3,A4,A5) Syntax NPV (discount, cashflow1,The formula for calculating a hurdle rate is not too complicated. Discounted Payback Period Formula. The discount rate is always added to 1 and raised to the power of n or t which are the time. ARR Formula. The above step is simultaneously applied in cell “ C12 ” also. Board: AQA, Edexcel, OCR, IB, Eduqas, WJEC. Identify the cash inflows and outflows associated with the investment or. In this example, the function NPV will take 2 arguments. By using the geometric series formula, the present value of a growing annuity will be shown as. Using the break-even point formula above we plug in the numbers ($10,000 in fixed costs / $120 in contribution margin). The two most commonly used are shown below: ROI = Net Income / Cost of Investment. 00 = $18. I f you’re dealing with a longer project that involves multiple cash flows, there’s a slightly different net present value formula you’ll need to use. The investment value should always be negative, with atleast one positive and one negative value. AQA, Edexcel, OCR, IB. The PV function is available in all versions Excel 365, Excel 2019, Excel 2016, Excel 2013, Excel 2010 and Excel 2007. Dalam penganggaran modal dan perencanaan investasi, NPV digunakan untuk menentukan profitabilitas dari suatu investasi atau proyek yang diusulkan. Formula and how to calculate Klaas Hermans Lifetime in digital and innovation, ensuring value delivery. However, you can also use Excel and other financial software to perform the NPV calculation automatically. This is an example of when PMI might use a similar question setup, but change the call of the question. See Present Value Cash Flows Calculator for related formulas and calculations. Unlike the PV function in excel, the NPV function/formula does not consider any period. ROI Formula. Here is an example of how to use the Net Present Value (NPV) function in Excel. It's often used as a discount rate in financial modeling, particularly when calculating NPV. First, you are asked to enter the discount rate, so you might refer directly to cell C4 (6%). To calculate the present value of an annuity due, use this formula: PVAD = Present value of an annuity due. The CGMA Study Hub keeps you on track to achieve your personal study goals. The following formula can be used to directly work out net cash flows: Net Cash Flows = (C IN − C OUT − D) × (1 − t) + D. Generally calculated using formula PV = FV / [1+i] ^n, where FV = Future value, i = rate of interest, and n = number of years (^ signifies an exponent). Array 1 : -10, 0, 5, 8 Array 2 : 0, 0, 4, 1 Thus, the combined array should be: -10, 0, 9, 9. Meanwhile, net present value (NPV) is the difference between the present.