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Excel instruction
Excel Functions
NPV (Net Present Value)
Calculates the net present value of a series of future cash flows at a stated interest
rate.
= NPV(rate, series)
Rate: Interest rate per compounding period.
Series:
Series of costs and incomes set up in a range of cells in the
spreadsheet.
Important: 1) Any cash flow at time zero is already in present value. Therefore, do
not include it in series rather add it later to the result.
2) Any year with a zero cash flow must have a 0 entered to ensure a correct result.
3) PV function can also be used, depending on how your cash flows are set up it
might be more convenient than NPV. (=PV(rate, nper, pmt, fv)
PMT (Payments)
Calculates equivalent periodic amounts based on present value and/or future values
at given interest rate. Note: it might be necessary to add a minus sign in front of the
function for an accurate answer.
= PMT(rate, nper, pv, fv)
Rate: Interest rate per compounding period.
Nper: Total number of periods.
Pv:
Present value.
Fv:
Future value
Calculates the internal rate of return for a series of cash flows at regular periods.
= IRR(series)
Series:
All the cash flows for which the rate of return will be calculated.
Important: 1) Series must include cash flow at time zero.
2) Any year with a zero cash flow must have a zero entered to ensure that the value
is correctly maintained for computation purposes.
3) RATE function can also be used, depending on how cash flows are set up it might
be the better option. (=RATE(nper, pmt, pv, fv)