In the previous video, I showed you how to use the NPV function to find the net present value of an investment. That function assumes that all of the cash flows happen at regular intervals—every month, every two months, every year, and so on. If you have a series of cash flows that occur at irregular intervals, you need to use the XNPV function to find the net present value.
- View Offline
- Exercise Files
- [Voiceover] In the previous movie,…I showed you how to use the NPV function…to find the net present value of an investment.…That function is very useful but it…assumes that all the cash flows happen…at regular intervals, that could be every month,…every two months, every year and so on.…If you have a series of cash flows…that occur at irregular intervals,…you need to use the XNPV function…to find the net present value.…I'll show you how to do that in this movie,…my sample file is the irregular…NPV schedule 0305 workbook that…you can find in the chapter three folder…of your exercise files collection.…
To calculate the net present value…for a series of irregular cash flows…you need to know a couple of things.…The first is the series of cash flows,…and that includes the original investment,…and also any future cash flows,…and also the dates on which those cash flows occur.…So here, next to the original value of minus 108,000,…I see that investment happens on May 1st 2016…and then the subsequent cash flows…happen as described here in the table.…
- Analyzing loans, payments, and interest
- Calculating depreciation
- Determining values and rates of return
- Calculating bond coupon dates and security durations
- Calculating security prices and yields
- Calculating prices and yields of securities with odd periods
Skill Level Intermediate
1. Analyzing Loans, Payments, and Interest
2. Calculating Depreciation
3. Determining Values and Rates of Return
4. Calculating Bond Coupon Dates and Security Durations
5. Calculating Security Prices and Yields
6. Calculating Prices and Yields of Securities with Odd Periods
Additional resources1m 24s
- Mark as unwatched
- Mark all as unwatched
Are you sure you want to mark all the videos in this course as unwatched?
This will not affect your course history, your reports, or your certificates of completion for this course.Cancel
Take notes with your new membership!
Type in the entry box, then click Enter to save your note.
1:30Press on any video thumbnail to jump immediately to the timecode shown.
Notes are saved with you account but can also be exported as plain text, MS Word, PDF, Google Doc, or Evernote.