NPV Excel function

City Financial Models • 10 June 2019

NPV - Using it correctly

Best Practice tells us to calculate NPV's mathematically, but the NPV function can be handy for checking the calculations.

However, there is a common mistake when applying the function.

Often the period when the initial investment is made (often described as year 0) is included in the range to discount. This needs to be added separately to the discounted future cashflows otherwise the function will return an incorrect NPV value.

< Older Post Newer Post >

Spill Error - Why doesn’t my Index Match work in Excel 365.

by City Financial Models • 27 May 2020

This something we are starting to see as we work across a number of different versions of Excel. Recently, Microsoft rolled out something called dynamic array formulas in Excel 365, which is a substantial change from previous versions. Dynamic array formulas automatically spill in to neighbouring blank cells. They have also added some very powerful new functions such as FILTER, UNIQUE, XLOOKUP and XMATCH. Even better there is no need to enter array formulas with control + shift + enter (CSE) as in other versions. However, because of the way dynamic arrays work, there will be instances where models built in other versions will have formulas which unintentionally now try to spill or populate into neighbouring cells when opened in Excel 365. Hence the Spill error. To overcome this, the @ character is added automatically to stop formulas unintentionally spilling multiple results into neighbouring cells. Because dynamic arrays are only available in the subscription version at the moment and not in the other versions, these powerful new functions may cause some compatibility issues. In general, the @ character should overcome the compatibility issues with models build in other versions to work in Excel 365, however the dynamic array functions at present will not work in non-subscription versions so should be used with caution if you aren’t sure of your final audience.