Investing money can become quite complicated. For example, you might need to borrow the money you invest in some other project. You could also reinvest any proceeds from the project. If you need to calculate the internal rate of return for a series of mixed cash flows, you can use the MIRR function.
- [Narrator] Investing money can become quite complicated.…For example, you might need to borrow the money…you invest in some other project.…You could also reinvest any proceeds from the project.…If you need to calculate the internal rate of return…for a series of mixed cash flows…you can use the mirr function.…I'll demonstrate how to do that in this movie.…And I'll base my work on the sample file…MixedCashFlows_03_08 which you can find…in the Chapter03 folder of the exercise files collection.…If we look at the bottom part of the worksheet first…we'll see that there's a series of cash flows.…
And if you've worked through previous movies…in this chapter this will look familiar.…We have our investment in cell B5…and that's a negative number.…Because it cash flowing out of our account.…And then we have a series of returns.…Starting in the first year and going to the seventh year.…The difference is that instead of a discount rate…what I'm looking at instead…is an interest rate on initial loan.…Which is 9%.…Which I have here.…
Author
Curt Frye
Released
10/9/2016- Recall what the type argument is used to determine when using the PMT function.
- Identify what the M stands for in the ACCRINTM function.
- Name the accounting rules used by the AMORDEGRC function to assign a depreciation coefficient to an asset.
- Recall what internal rate of return generated by the IRR function should be measured against to determine if it is a good investment.
- List the three regular intervals that coupon bonds pay interest at.
- Determine the function that provides a more conservative bond evaluation compared to the DURATION function.
- Explain what the RECEIVED function shows.
Skill Level Intermediate
Duration
Views
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Introduction
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Welcome58s
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1. Analyzing Loans, Payments, and Interest
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2. Calculating Depreciation
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3. Determining Values and Rates of Return
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4. Calculating Bond Coupon Dates and Security Durations
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5. Calculating Security Prices and Yields
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6. Analyzing Simulation Results
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Conclusion
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Next steps1m 12s
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Video: Calculating internal rate of return for mixed cash flows (MIRR)