@railpath/finance-toolkit/dist/utils/irr/calculateNPV.js

Production-ready finance library for portfolio construction, risk analytics, quantitative metrics, and ML-based regime detection

"use strict";
Object.defineProperty(exports, "__esModule", { value: true });
exports.calculateNPV = calculateNPV;
/**
 * Calculate Net Present Value (NPV) of cash flows
 *
 * NPV = Σ(CF_i / (1 + r)^t_i)
 *
 * @param cashFlows - Array of cash flows (positive for inflows, negative for outflows)
 * @param timePeriods - Array of time periods in years corresponding to each cash flow
 * @param rate - Discount rate (as decimal, e.g., 0.1 for 10%)
 * @returns Net Present Value
 */
function calculateNPV(cashFlows, timePeriods, rate) {
    if (cashFlows.length !== timePeriods.length) {
        throw new Error('Cash flows and time periods must have same length');
    }
    if (rate <= -1) {
        throw new Error('Discount rate must be greater than -1');
    }
    return cashFlows.reduce((sum, cf, index) => {
        const time = timePeriods[index];
        if (time < 0) {
            throw new Error('Time periods must be non-negative');
        }
        return sum + cf / Math.pow(1 + rate, time);
    }, 0);
}