# Thread: Formula to Calculate the Standard Deviation of NPV

1. I am looking for a formula in Excel to Calculate the standard deviation of NPV (Net Present Value)

Your assistance will be most appreciated

Regards

Howard

2. [quote name='HowardC' post='774703' date='11-May-2009 14:40']I am looking for a formula in Excel to Calculate the standard deviation of NPV (Net Present Value)

Your assistance will be most appreciated

Regards

Howard[/quote]

What are you trying to acheive? Standard Deviation looks to a sample and measures how widely values are dispersed from the average value.
If you have values, I would think first get the NPV of each value using NPV function, then use STDEV or STDEVP on each NPV value to determine its deviation.
In other words, have Excel first perform NPV computations, take those results as values for a Standard Deviation computation.

Regards,

Tom Duthie

3. [quote name='duthiet' post='774705' date='11-May-2009 20:05']What are you trying to acheive? Standard Deviation looks to a sample and measures how widely values are dispersed from the average value.
If you have values, I would think first get the NPV of each value using NPV function, then use STDEV or STDEVP on each NPV value to determine its deviation.
In other words, have Excel first perform NPV computations, take those results as values for a Standard Deviation computation.

Regards,

Tom Duthie[/quote]

Hi Tom

I managed to sort out the formula-see attached sample

Regards

Howard

4. I think the problem is in your question about NPV. The question is not about calculation of a std dev for NPV but how to calculate a weighted standard deviation. The NPV aspect of the question is immaterial.

Your formula can be simplified by using:
=SQRT(SUMPRODUCT(B2:B6,(C2:C6-D9)^2))

and not requiring each individual entry.

Note: You could get rid of the intermediate calcs in D2: D6. You can calculated the weighted average directly in D9 as:
=SUMPRODUCT(B2:B6,C2:C6)

Steve

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