How to Use Net Present Value (NPV) Let's say you're contemplating setting up a factory that's going to need initial funds of $250,000 during the first year.

Learn what present value (PV) and future value (FV) are and how to calculate present value in Excel given the future value, interest rate, and period.

Net present value (NPV) is used to estimate the profitability of projects or investments. You can calculate NPV in two ways using Microsoft Excel.