NPV and Discount Rate

[schioettoStefano_Chio]

Hi everybody!

I just ran into a strange behavior for the NPV formula, that I don't understand.

I am used to the notion that the NPV of a given series of values decreases as the discount rate increases. But take a look at the table below:

Series	Disc. Rate	NPV
-778688.2304	8.00%	($4,292,762.91)
-738005.9719	8.50%	($4,215,446.11)
-696612.9226	9.00%	($4,139,158.97)
-654489.9185	9.50%	($4,064,034.18)
-611617.327	10.00%	($3,990,178.10)
-567975.0348	10.50%	($3,917,674.53)
-523542.4367	11.00%	($3,846,587.90)
-478298.4223
-432221.3644
-385289.1055
-337478.9447
-288767.6245
-239131.3163
-188545.6067
-136985.4829
-84425.31739
-30838.85305
23800.81275
79521.24419
136350.6834
194318.0676
253453.0459
313785.9975
375348.0497
438171.0967

As you can see, the NPV, while always negative, keeps increasing as the discount rate increases from 8% to 11%. Can anyone explain to me how this is happening?

Thanks!

Stefano 

[#2]

@schioettoStefano_Chio 

What I notice is that the absolute amount is decreasing. This makes me suspect that you may have just entered the various variables in the NPV function with a missing minus sign for one of them.

As an aside, when we get unusual or unexpected values from a function like NPV, the likelihood that it's a problem with Excel is virtually zero; far more likely that we've inadvertently done something incorrectly in using the function.