Monthly NPV

[Robo]

If I wanted to do a monthly NPV model rather than an annual one, do I
just divide the discount rate by 12?


I think the long hand formula would be ((1+r)^(1/12))

What data would I need to calculate a monthly NPV? Any help please.

 

[Guest]

I'm not sure about the timing your cash flows from your question. But
normally, using the annual discount rate and divide it by 12 is a correct
approach for most questions.

If you need additional help, maybe you can share with us your exact finance
question.

Regards,
Edwin Tam
(e-mail address removed)
http://www.vonixx.com

 

[Fred Smith]

If your model assumes monthly compounding, then, yes, you simply divide the
discount rate by 12. If you want annual compounding, you would have to convert
your rate, using, for example, the EFFECT function.