# How to Calculate NPV using Numpy (with example)

You can use the following template to calculate the NPV using Numpy:

```import numpy as np
npv = np.npv(discount rate,[initial investment in negative terms, cash flow for each year separated by comma])
print (npv)
```

Let’s now review a simple example with the steps to calculate the NPV.

## Steps to Calculate the NPV using Numpy

### Step 1: Gather your data

To start, you’ll need to gather the data for the NPV calculation.

For example, I gathered the following data about a project:

• The initial investment is \$1100
• The project is expected to generate:
• \$300 in year-1
• \$450 in year-2
• \$800 in year-3
• The discount rate is 5%

### Step 2: Calculate the NPV using Numpy

Next, use the following template to derive the NPV:

```import numpy as np
npv = np.npv(discount rate,[initial investment in negative terms, cash flow for each year separated by comma])
print (npv)
```

The is how the full Python code would look like in the context of our example:

```import numpy as np
npv = np.npv(0.05,[-1100,300,450,800])
print (npv)
```

Run the code in Python and you’ll get the NPV of 284.947:

Since the NPV is positive, you should invest in the project.

You may want to check the following source that includes a tool to calculate the NPV using Python.