diff options
Diffstat (limited to 'numpy/lib/financial.py')
| -rw-r--r-- | numpy/lib/financial.py | 33 |
1 files changed, 27 insertions, 6 deletions
diff --git a/numpy/lib/financial.py b/numpy/lib/financial.py index 216687475..d72384e99 100644 --- a/numpy/lib/financial.py +++ b/numpy/lib/financial.py @@ -715,8 +715,6 @@ def irr(values): >>> round(np.irr([-5, 10.5, 1, -8, 1]), 5) 0.0886 - (Compare with the Example given for numpy.lib.financial.npv) - """ # `np.roots` call is why this function does not support Decimal type. # @@ -763,6 +761,15 @@ def npv(rate, values): The NPV of the input cash flow series `values` at the discount `rate`. + Warnings + -------- + ``npv`` considers a series of cashflows starting in the present (t = 0). + NPV can also be defined with a series of future cashflows, paid at the + end, rather than the start, of each period. If future cashflows are used, + the first cashflow `values[0]` must be zeroed and added to the net + present value of the future cashflows. This is demonstrated in the + examples. + Notes ----- Returns the result of: [G]_ @@ -776,10 +783,24 @@ def npv(rate, values): Examples -------- - >>> np.npv(0.281,[-100, 39, 59, 55, 20]) - -0.0084785916384548798 # may vary - - (Compare with the Example given for numpy.lib.financial.irr) + Consider a potential project with an initial investment of $40 000 and + projected cashflows of $5 000, $8 000, $12 000 and $30 000 at the end of + each period discounted at a rate of 8% per period. To find the project's + net present value: + + >>> rate, cashflows = 0.08, [-40_000, 5_000, 8_000, 12_000, 30_000] + >>> np.npv(rate, cashflows).round(5) + 3065.22267 + + It may be preferable to split the projected cashflow into an initial + investment and expected future cashflows. In this case, the value of + the initial cashflow is zero and the initial investment is later added + to the future cashflows net present value: + + >>> initial_cashflow = cashflows[0] + >>> cashflows[0] = 0 + >>> np.round(np.npv(rate, cashflows) + initial_cashflow, 5) + 3065.22267 """ values = np.asarray(values) |