How to Calculate Net Present Value Given Irregular Inputs


show more XNPV: Calculating net present value given irregular inputs provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2010: Financial Functions in Depth show less
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XNPV: Calculating net present value given irregular inputs

In the previous movie 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. So for the XNPV function, you have two sets of arguments. The first is the discount rate and the discount rate is the return that you can expect on a guaranteed investment.

So for example, if you were able to invest in U.S. Treasury bill with a 5% rate, then that would serve as the discount rate. Next you need the values anddates. So the first of the values and those are simply the cash flows. Negative cash flows in this number format are shown in parentheses so we have a buy-in of $108,000. And the next each one of these cash flows you have the date. So we have May 1, 2011, June 1, 2011, August 1, 2011.

So you see that...

XNPV: Calculating net present value given irregular inputs
Video duration: 2m 32s 2h 18m Intermediate

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XNPV: Calculating net present value given irregular inputs provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2010: Financial Functions in Depth

Subjects:
Business IT
Software:
Excel
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