[NumPy-Tickets] [NumPy] #2196: The behavior of the npv function does not match the documentation

NumPy Trac numpy-tickets@scipy....
Sat Aug 4 06:35:47 CDT 2012

#2196: The behavior of the npv function does not match the documentation
 Reporter:  npgraham1                  |       Owner:  somebody   
     Type:  defect                     |      Status:  new        
 Priority:  normal                     |   Milestone:  Unscheduled
Component:  numpy.core                 |     Version:  1.6.1      
 Keywords:  finance npv documentation  |  
 The documentation for the npv indicates that it returns the true net
 present value, as given by the formula shown on the npv function's page.
 This is the technically correct and universally accepted definition of net
 present value.  However, the function itself appears to mimic the Excel
 NPV function, which simply calculates the present value of a series of
 cash flows, and is known to be incorrect (but persists for compatibility

 Put differently, the documentation indicates that the summation is from 0
 to n-1, but the function returns a summation of 1 to n.

 Since the current behavior is widely understood, it is probably acceptable
 to change the documentation to match, with a brief explanation of how to
 correctly compute NPV using the npv function.
 Alternatively, the function could be (easily) altered to match the
 documentation (a brief note that this is different from several popular
 spreadsheet NPV functions might be useful).  Either way,
 one ought to change in order to match the other; as someone who studies
 finance, I'd prefer the correct calculation, but either way is reasonable.

Ticket URL: <http://projects.scipy.org/numpy/ticket/2196>
NumPy <http://projects.scipy.org/numpy>
My example project

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