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    Lec Sheet 2

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    Hoang Pham
    This document discusses financial functions like NPV, PV, and IRR in Excel. It provides examples of how to calculate NPV and PV for cash flows over multiple years using Excel, noting that NPV includes the present period while PV can only handle constant cash flows. It also demonstrates how to calculate the internal rate of return (IRR) for a set of cash flows and shows there can be multiple IRRs that produce an NPV of 0.

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    Lec Sheet 2

    Uploaded by

    Hoang Pham
    15 views2 pages
    This document discusses financial functions like NPV, PV, and IRR in Excel. It provides examples of how to calculate NPV and PV for cash flows over multiple years using Excel, noting that NPV includes the present period while PV can only handle constant cash flows. It also demonstrates how to calculate the internal rate of return (IRR) for a set of cash flows and shows there can be multiple IRRs that produce an NPV of 0.

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    This document discusses financial functions like NPV, PV, and IRR in Excel. It provides examples of how to calculate NPV and PV for cash flows over multiple years using Excel, noting that NPV includes the present period while PV can only handle constant cash flows. It also demonstrates how to calculate the internal rate of return (IRR) for a set of cash flows and shows there can be multiple IRRs that produce an NPV of 0.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    15 views2 pages

    Lec Sheet 2

    Uploaded by

    Hoang Pham
    This document discusses financial functions like NPV, PV, and IRR in Excel. It provides examples of how to calculate NPV and PV for cash flows over multiple years using Excel, noting that NPV includes the present period while PV can only handle constant cash flows. It also demonstrates how to calculate the internal rate of return (IRR) for a set of cash flows and shows there can be multiple IRRs that produce an NPV of 0.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    of 2

    NPV and PV Functions in Excel

    Discount rate 10% Year Cash flow Cash flow


    0 -400 -400
    1 100 100
    2 150 100
    Excel's NPV starts 3 120 100 PV can only deal with
    from the next period, 4 120 100 constant cash flows
    does not include the 5 100 100
    present period!
    Using NPV Using PV
    Present value 449.09 379.08 Present value
    Net Present Value 49.09 -20.92 Net Present Value
    IRR Function in Excel
    IRR 11.327% IRR1 8.783%
    NPV 0.00 IRR2 26.650%
    NPV1 0.00
    Year Cash flow NPV2 0.00
    0 -400
    1 100 Year Cash flow
    2 120 0 -145
    3 140 1 100
    4 100 2 100
    5 80 3 100
    4 100
    5 -275

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