Net Present Value (NPV)

This component computes the NPV (Net Present Value) just like in spreadsheet tools like Microsoft Excel and Google Sheet. Adopt this component to track the total value of one or more investment projects with periodic transactions/cash flows.

The metric computation is implemented using Group Loop, Math Formula and Column Expression nodes.

The component 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) defined as transactions. The calculation iterates for each of the defined portfolio/project IDs. Make sure that you have at least one single value column with the Interest rate, one column for the cash flows and one column for the project/portfolio by which you want the transactions to be grouped.

DISCLAIMER: Similarly to when adopting the NPV() function in spreadsheet tools, the NPV component by default considers all input cash flows to be future cash flows. If you provide at the input also the current period “T_0” cash flows (usually negative), enable the check box “Current Period Transaction in Input”. When this is enabled the component outputs a second column “NPV+T_0” where the NPV on future cash flows is automatically summed to the current period cash flow.

Microsoft Excel Docs: support.microsoft.com/en-us/office/npv-function-8672cb67-2576-4d07-b67b-ac28acf2a568

Google Sheets Docs: support.google.com/docs/answer/3093184

This component, verified by KNIME, was developed by finance analytics experts at Mydral, KNIME Partner of the Year 2022: mydral.com/en/knime-uk

Input ports

1. Type: Table
   Investments Data
   A KNIME Table where each row represents a financial transaction. A column of type String is necessary to identify the financial project/portfolio. A column of type Double or Integer is necessary to identify the value of the financial transactions. By the default this should be future transactions/cash flows. You can provide the first period value of each project, but you need to enable “Current Period Transaction in Input” in the configurations. A single value column of type Double is necessary to identify the discount rate.

Output ports

1. Type: Table
   NPV
   A table is returned with a column for the name of the project/portfolio and a column for the NPV value of each project. If enabled the output additionally outputs “NPV+T_0 '' where the project NPV is summed to its current period cash flow.