NPV problem

[decafdave]

Hey,

I am calculating NPV for a land buying project. However, all the cash flows until the end (when land is sold, hopefully for profit) are negative due to property taxes. My formula is as follows: NPV(B16,E29:AC29,MAX(E32:AC32))-B11

B16=discount rate
E29:AC29 are all possible property tax cash outflows-depending on length of the project it will end before AC29 or up to.
Max E32:AC32= land sold price-for this simplicistic initial model we are assuming continued appreciation or stabilization, no declines.
-B11= the initial outflow for purchase of land that must be added into the excel

I calculate it with my financial calculator and get a different answer. Anyone have an idea?

Thanks so much!

[seckert]

I use the NPV in some pretty hefty models, and always found it to be accurate, so I'm guessing it's either a sign or format issue.

A few things to check:

Make sure your discount rate in Excel is stated as a positive monthly decimal. (i.e. 12% annual discount rate is entered as 0.01.)

Make sure there are no blank columns

Check your signs. Initial cash investment should be positive (since you're subtracting it).

If it's not something like this, repost with the file and I can take a look.

SAE

[decafdave]

Thanks for the reply. I realized my mistake. I was treating the land saleat the end as a cash inflow further than my last year and now that I have accounted for that everything's ok. I also had to take it net of property taxes and rent income for that year since it is assumed to be sold Dec. 31.