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PV

FV

NPV

XNPV

IRR

XIRR

SUMPRODUCT

LINEST

FVSCHEDULE

EFFECT

PPMT

IPMT

Working

Future value of cash flows

not periodic

Internal rate of return

EAR

Principal Component

Interest Component

https://support.office.microsoft.com/client/financial-functions-5658d81e-6035-4f24-89c1-fbf124c2b

-6035-4f24-89c1-fbf124c2b1d8

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FV function

FV, one of the financial functions, calculates the future value of an investment based on a

Use the Excel Formula Coach to find the future value of a series of payments. At the same

Or, use the Excel Formula Coach to find the future value of a single, lump sum payment.

Syntax

FV(rate,nper,pmt,[pv],[type])

For a more complete description of the arguments in FV and for more information on annui

The FV function syntax has the following arguments:

RateRequired. The interest rate per period.

NperRequired. The total number of payment periods in an annuity.

PmtRequired. The payment made each period; it cannot change over the life of the a

PvOptional. The present value, or the lump-sum amount that a series of future payme

TypeOptional. The number 0 or 1 and indicates when payments are due. If type is om

Set type equal to

0 At the end of the period

1 At the beginning of the period

Remarks

Make sure that you are consistent about the units you use for specifying rate and nper.

For all the arguments, cash you pay out, such as deposits to savings, is represented by

Examples

Copy the example data in the following table, and paste it in cell A1 of a new Excel worksh

Data

Description

0.06 Annual interest rate

10 Number of payments

-200 Amount of the payment

-500 Present value

1 Payment is due at the beginning of the period (0 indicates p

Formula

Description

=FV(A2/12, A3, A4, A5, A6)

Future value of an investment using

the terms in A2:A5.

Example 2

Data

Formula

=FV(A2/12, A3, A4)

Example 3

Data

Formula

Example 4

Data

Formula

Description

0.12 Annual interest rate

12 Number of payments

-1000 Amount of the payment

Description

Future value of an investment using t

Description

0.11 Annual interest rate

35 Number of payments

-2000 Amount of the payment

1 Payment is due at the beginning of the year (0 indicates end

Description

#VALUE! Future value of an investment with th

Description

0.06 Annual interest rate

12 Number of payments

-100 Amount of the payment

-1000 Present value

1 Payment is due at the beginning of the year (0 indicates end

Description

#VALUE! Future value of an investment using t

ue of an investment based on a constant interest rate. You can use FV with either periodic, constan

eries of payments. At the same time, you'll learn how to use the FV function in a formula.

n an annuity.

not change over the life of the annuity. Typically, pmt contains principal and interest but no other fee

unt that a series of future payments is worth right now. If pv is omitted, it is assumed to be 0 (zero),

se for specifying rate and nper. If you make monthly payments on a four-year loan at 12 percent ann

ts to savings, is represented by negative numbers; cash you receive, such as dividend checks, is rep

n cell A1 of a new Excel worksheet. For formulas to show results, select them, press F2, and then pr

Result

$2,581.40

Result

$12,682.50

Result

$82,846.25

Result

$2,301.40

tion in a formula.

nd interest but no other fees or taxes. If pmt is omitted, you must include the pv argument.

-year loan at 12 percent annual interest, use 12%/12 for rate and 4*12 for nper. If you make annual

them, press F2, and then press Enter. If you need to, you can adjust the column widths to see all the

the pv argument.

nper. If you make annual payments on the same loan, use 12% for rate and 4 for nper.

d 4 for nper.

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XNPV function

This article describes the formula syntax and usage of theXNPVfunction in Microsoft Excel.

Description

Returns the net present value for a schedule of cash flows that is not necessarily period

Syntax

XNPV(rate, values, dates)

The XNPV function syntax has the following arguments:

RateRequired. The discount rate to apply to the cash flows.

ValuesRequired. A series of cash flows that corresponds to a schedule of payments in dates. The

DatesRequired. A schedule of payment dates that corresponds to the cash flow payments. The fi

Remarks

Microsoft Excel stores dates as sequential serial numbers so they can be used in calculations. By d

Numbers in dates are truncated to integers.

If any argument is nonnumeric, XNPV returns the #VALUE! error value.

If any number in dates is not a valid date, XNPV returns the #VALUE! error value.

If any number in dates precedes the starting date, XNPV returns the #NUM! error value.

If values and dates contain a different number of values, XNPV returns the #NUM! error value.

XNPV is calculated as follows:

where:

d1 = the 0th payment date.

Pi = the ith, or last, payment.

Example

Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet. For

Values

Dates

($10,000)

$2,750

$4,250

$3,250

$2,750

1/1/2008

3/1/2008

10/30/2008

2/15/2009

4/1/2009

Formula

Description

for an investment with

the above cost and

returns. The cash flows

are discounted at 9

percent.

Result

$ 2,086.65

n Microsoft Excel.

not necessarily periodic. To calculate the net present value for a series of cash flows that is peri

f payments in dates. The first payment is optional and corresponds to a cost or payment that occurs at the b

sh flow payments. The first payment date indicates the beginning of the schedule of payments. All other dat

sed in calculations. By default, January 1, 1900 is serial number 1, and January 1, 2008 is serial number 394

M! error value.

#NUM! error value.

ew Excel worksheet. For formulas to show results, select them, press F2, and then press Enter. If you need to

ayment that occurs at the beginning of the investment. If the first value is a cost or payment, it must be a ne

e of payments. All other dates must be later than this date, but they may occur in any order.

2008 is serial number 39448 because it is 39,448 days after January 1, 1900.

n press Enter. If you need to, you can adjust the column widths to see all the data.

or payment, it must be a negative value. All succeeding payments are discounted based on a 365-day year. T

n any order.

based on a 365-day year. The series of values must contain at least one positive value and one negative va

IRR function

This article describes the formula syntax and usage of the IRRfunction in Microsoft Excel.

Description

Returns the internal rate of return for a series of cash flows represented by the numbers in values. These cash flows d

investment co

Syntax

IRR(values, [guess])

The IRR function syntax has the following arguments:

ValuesRequired. An array or a reference to cells that contain numbers for which you w

Values must contain at least one positive value and one negative value to calculate

IRR uses the order of values to interpret the order of cash flows. Be sure to enter you

If an array or reference argument contains text, logical values, or empty cells, those

GuessOptional. A number that you guess is close to the result of IRR.

Microsoft Excel uses an iterative technique for calculating IRR. Starting with guess, IR

In most cases you do not need to provide guess for the IRR calculation. If guess is om

If IRR gives the #NUM! error value, or if the result is not close to what you expected,

Remarks

IRR is closely related to NPV, the net present value function. The rate of return calculated b

NPV(IRR(A2:A7),A2:A7) equals 1.79E-09 [Within the accuracy of the IRR calculation, the va

Example

Copy the example data in the following table, and paste it in cell A1 of a new Excel worksh

Data

Description

($70,000) Initial cost of a business

$12,000 Net income for the first year

$15,000 Net income for the second year

$18,000 Net income for the third year

$21,000 Net income for the fourth year

$26,000 Net income for the fifth year

Formula

Descriptio Result

Err:523 Investment' -2.10%

Err:523 Internal rat

8.70%

Err:523 To calculate the internal rate of return after two years, you need to include a gu

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ers in values. These cash flows do not have to be even, as they would be for an annuity. However, the cash flows must occur at regul

investment consisting of payments (negative values) and income (positive values) that occur at regular periods.

numbers for which you want to calculate the internal rate of return.

ws. Be sure to enter your payment and income values in the sequence you want.

R. Starting with guess, IRR cycles through the calculation until the result is accurate within 0.00001

e to what you expected, try again with a different value for guess.

ate of return calculated by IRR is the interest rate corresponding to a 0 (zero) net present value. The

1 of a new Excel worksheet. For formulas to show results, select them, press F2, and then press Ent

he cash flows must occur at regular intervals, such as monthly or annually. The internal rate of return is the interest rate received for

s) that occur at regular periods.

accurate within 0.00001 percent. If IRR can't find a result that works after 20 tries, the #NUM! erro

o) net present value. The following formula demonstrates how NPV and IRR are related:

ss F2, and then press Enter. If you need to, you can adjust the column widths to see all the data.

R are related:

LINEST function

This article describes the formula syntax and usage of the LINEST function in Microsoft Excel. Find

Description

The LINEST function calculates the statistics for a line by using the "least squares" method to calcu

The equation for the line is:

y = mx + b

or

y = m1x1 + m2x2 + ... + b

if there are multiple ranges of x-values, where the dependent y-values are a function of the indepe

Syntax

LINEST(known_y's, [known_x's], [const], [stats])

The LINEST function syntax has the following arguments:

Syntax

known_y'sRequired. The set of y-values that you already know in the relationship y = mx + b

If the range of known_y's is contained in a single row, each row of known_x's is interpreted a

known_x'sOptional. A set of x-values that you may already know in the relationship y = mx +

The range of known_x's can include one or more sets of variables. If only one variable is use

If known_x's is omitted, it is assumed to be the array {1,2,3,...} that is the same size as kno

If const is FALSE, b is set equal to 0 and the m-values are adjusted to fit y = mx.

statsOptional. A logical value specifying whether to return additional regression statistics.

If stats is TRUE, LINEST returns the additional regression statistics; as a result, the returned a

If stats is FALSE or omitted, LINEST returns only the m-coefficients and the constant b.

The additional regression statistics are as follows.

Statistic

Description

se1,se2,...,sen

The

standard

error

values for

the

coefficients

m1,m2,...,

mn.

seb

The

standard

error value

for the

constant b

(seb =

#N/A when

const is

FALSE).

r2

and ranges

in value

from 0 to

1. If it is 1,

there is a

perfect

correlation

in the

sample

there is no

difference

between

the

estimated

y-value

and the

actual yvalue. At

the other

extreme, if

the

coefficient

of

determinat

ion is 0,

the

regression

equation is

not helpful

in

predicting

a y-value.

sey

The

standard

error for

the y

estimate.

The F

statistic, or

the Fobserved

value. Use

the F

statistic to

determine

whether

the

observed

relationshi

p between

the

dependent

and

independe

nt

variables

occurs by

chance.

df

The degrees of freedom. Use the degrees of freedom to help you find F-critical val

ssreg

The

regression

sum of

squares.

ssresid

The

residual

sum of

squares.

For

information

about how

ssreg and

ssresid are

calculated,

see

"Remarks,"

later in this

topic.

The following illustration shows the order in which the additional regression statistics are returned.

Remarks

You can describe any straight line with the slope and the y-intercept:

Slope (m):

To find the slope of a line, often written as m, take two points on the line, (x1,y1) and (x2,y2); th

Y-intercept (b):

The y-intercept of a line, often written as b, is the value of y at the point where the line crosses

The equation of a straight line is y = mx + b. Once you know the values of m and b, you can ca

When you have only one independent x-variable, you can obtain the slope and y-intercept value

Slope:

=INDEX(LINEST(known_y's,known_x's),1)

Y-intercept:

=INDEX(LINEST(known_y's,known_x's),2)

The accuracy of the line calculated by the LINEST function depends on the degree of scatter in

where x and y are sample means; that is, x = AVERAGE(known x's) and y = AVERAGE(known_y'

The line- and curve-fitting functions LINEST and LOGEST can calculate the best straight line or e

In regression analysis, Excel calculates for each point the squared difference between the y-valu

In some cases, one or more of the X columns (assume that Ys and Xs are in columns) may hav

The value of df is calculated as follows, when no X columns are removed from the model due to

Formulas that return arrays must be entered as array formulas.

Note In Excel Online you cannot create array formulas.

When entering an array constant (such as known_x's) as an argument, use commas to separate

Note that the y-values predicted by the regression equation may not be valid if they are outside

The underlying algorithm used in the LINEST function is different than the underlying algorithm

LINEST returns a value of 0. The algorithm of the LINEST function is designed to return reaso

SLOPE and INTERCEPT return a #DIV/0! error. The algorithm of the SLOPE and INTERCEPT fun

In addition to using LOGEST to calculate statistics for other regression types, you can use LINES

#NAME?

works when you have a single column of y-values and a single column of x-values to calculate t

y = m1*x + m2*x^2 + m3*x^3 + b

You can adjust this formula to calculate other types of regression, but in some cases it requires

The F-test value that is returned by the LINEST function differs from the F-test value that is retu

Examples

Example 1 - Slope and Y-Intercept

Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet. For

Known y

Known x

1

9

5

7

0

4

2

3

Result (yintercept)

Result (slope)

Formula (array

formula in cells

A7:B7)

Err:502

Example 2 - Simple Linear Regression

Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet. For

Month

Sales

1

$3,100

2

$4,500

3

$4,400

4

$5,400

5

$7,500

6

$8,100

Formula

Result

Err:502

$11,000

Calculates

the

estimate of

the sales in

the ninth

month,

based on

sales in

months 2

through 6.

Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet. For

Entrances

Age (x4)

(x3)

2310

2333

2356

2379

2402

2425

2448

2471

2494

2517

2540

2

2

1.5

2

3

2

1.5

2

3

4

3

-234.2371645

13.26801148

0.996747993

459.7536742

1732393319

Formula (array

formula entered

in A14:A18)

2

2

3

3

2

4

2

2

3

4

2

Assessed

value (y)

20

12

33

43

53

23

99

34

23

55

22

$142,000

$144,000

$151,000

$150,000

$139,000

$169,000

$126,000

$142,900

$163,000

$169,000

$149,000

Err:502

Example 4 - Using the F and r2 Statistics

In the preceding example, the coefficient of determination, or r2, is 0.99675 (see cell A17 in the ou

Assume for the moment that in fact there is no relationship among the variables, but that you have

The F and df values in output from the LINEST function can be used to assess the likelihood of a hig

Assuming an Alpha value of 0.05, v1 = 11 6 1 = 4 and v2 = 6, the critical level of F is 4.53. Sinc

Example 5 - Calculating the t-Statistics

Another hypothesis test will determine whether each slope coefficient is useful in estimating the as

t = m4 se4 = -234.24 13.268 = -17.7

If the absolute value of t is sufficiently high, it can be concluded that the slope coefficient is useful

If you consult a table in a statistics manual, you will find that t-critical, two tailed, with 6 degrees o

Variable

Floor space

t-observed

value

5.1

Number of

offices

31.3

Number of

entrances

4.8

Age

17.7

These values all have an absolute value greater than 2.447; therefore, all the variables used in the

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Microsoft Excel. Find links to more information about charting and performing a regression analysis in the Se

res" method to calculate a straight line that best fits your data, and then returns an array that describes the

nction of the independent x-values. The m-values are coefficients corresponding to each x-value, and b is a c

ationship y = mx + b.

elationship y = mx + b.

y one variable is used, known_y's and known_x's can be ranges of any shape, as long as they have equal dim

to equal 0.

ression statistics.

he constant b.

m and b, you can calculate any point on the line by plugging the y- or x-value into that equation. You can als

degree of scatter in your data. The more linear the data, the more accurate the LINEST model. LINEST uses t

AVERAGE(known_y's).

best straight line or exponential curve that fits your data. However, you have to decide which of the two resu

e between the y-value estimated for that point and its actual y-value. The sum of these squared differences

n columns) may have no additional predictive value in the presence of the other X columns. In other words,

om the model due to collinearity: if there are k columns of known_xs and const = TRUE or is omitted, df = n

commas to separate values that are contained in the same row and semicolons to separate rows. Separator

id if they are outside the range of the y-values you used to determine the equation.

underlying algorithm used in the SLOPE and INTERCEPT functions. The difference between these algorithms c

gned to return reasonable results for collinear data and, in this case, at least one answer can be found.

E and INTERCEPT functions is designed to look for only one answer, and in this case there can be more than

s, you can use LINEST to calculate a range of other regression types by entering functions of the x and y vari

me cases it requires the adjustment of the output values and other statistics.

est value that is returned by the FTEST function. LINEST returns the F statistic, whereas FTEST returns the pr

Excel worksheet. For formulas to show results, select them, press F2, and then press Enter. If you need to, yo

Excel worksheet. For formulas to show results, select them, press F2, and then press Enter. If you need to, yo

Excel worksheet. For formulas to show results, select them, press F2, and then press Enter. If you need to, yo

ee cell A17 in the output for LINEST), which would indicate a strong relationship between the independent v

es, but that you have drawn a rare sample of 11 office buildings that causes the statistical analysis to demon

the likelihood of a higher F value occurring by chance. F can be compared with critical values in published F-d

evel of F is 4.53. Since F = 459.753674 is much higher than 4.53, it is extremely unlikely that an F value this

l in estimating the assessed value of an office building in Example 3. For example, to test the age coefficient

coefficient is useful in estimating the assessed value of an office building in Example 3. The following table

ed, with 6 degrees of freedom and Alpha = 0.05 is 2.447. This critical value can also be found by using the T

variables used in the regression equation are useful in predicting the assessed value of office buildings in thi

an array that describes the line. You can also combine LINEST with other functions to calculate the statistics

to each x-value, and b is a constant value. Note that y, x, and m can be vectors. The array that the LINEST fu

long as they have equal dimensions. If more than one variable is used, known_y's must be a vector (that is,

sreg,ssresid}.

INEST model. LINEST uses the method of least squares for determining the best fit for the data. When you ha

ecide which of the two results best fits your data. You can calculate TREND(known_y's,known_x's) for a straig

these squared differences is called the residual sum of squares, ssresid. Excel then calculates the total sum

X columns. In other words, eliminating one or more X columns might lead to predicted Y values that are equa

= TRUE or is omitted, df = n k 1. If const = FALSE, df = n - k. In both cases, each X column that was remov

o separate rows. Separator characters may be different depending on your regional settings.

between these algorithms can lead to different results when data is undetermined and collinear. For example

unctions of the x and y variables as the x and y series for LINEST. For example, the following formula:

ess Enter. If you need to, you can adjust the column widths to see all the data.

ess Enter. If you need to, you can adjust the column widths to see all the data.

ess Enter. If you need to, you can adjust the column widths to see all the data.

between the independent variables and the sale price. You can use the F statistic to determine whether these

tatistical analysis to demonstrate a strong relationship. The term "Alpha" is used for the probability of errone

tical values in published F-distribution tables or the FDIST function in Excel can be used to calculate the prob

unlikely that an F value this high occurred by chance. (With Alpha = 0.05, the hypothesis that there is no rela

, to test the age coefficient for statistical significance, divide -234.24 (age slope coefficient) by 13.268 (the e

mple 3. The following table shows the absolute values of the 4 t-observed values.

lso be found by using the TINV function in Excel. TINV(0.05,6) = 2.447. Because the absolute value of t (17.7

s to calculate the statistics for other types of models that are linear in the unknown parameters, including po

The array that the LINEST function returns is {mn,mn-1,...,m1,b}. LINEST can also return additional regressio

s must be a vector (that is, a range with a height of one row or a width of one column).

fit for the data. When you have only one independent x-variable, the calculations for m and b are based on th

n_y's,known_x's) for a straight line, or GROWTH(known_y's, known_x's) for an exponential curve. These funct

en calculates the total sum of squares, sstotal. When the const argument = TRUE or is omitted, the total sum

icted Y values that are equally accurate. In that case these redundant X columns should be omitted from the

nal settings.

d and collinear. For example, if the data points of the known_y's argument are 0 and the data points of the k

he following formula:

to determine whether these results, with such a high r2 value, occurred by chance.

e used to calculate the probability of a larger F value occurring by chance. The appropriate F distribution has

othesis that there is no relationship between known_ys and known_xs is to be rejected when F exceeds the

coefficient) by 13.268 (the estimated standard error of age coefficients in cell A15). The following is the t-obs

the absolute value of t (17.7) is greater than 2.447, age is an important variable when estimating the assess

wn parameters, including polynomial, logarithmic, exponential, and power series. Because this function retur

onential curve. These functions, without the new_x's argument, return an array of y-values predicted along

E or is omitted, the total sum of squares is the sum of the squared differences between the actual y-values an

should be omitted from the regression model. This phenomenon is called collinearity because any redunda

ppropriate F distribution has v1 and v2 degrees of freedom. If n is the number of data points and const = TRU

ejected when F exceeds the critical level, 4.53.) You can use the FDIST function in Excel to obtain the probab

when estimating the assessed value of an office building. Each of the other independent variables can be tes

Because this function returns an array of values, it must be entered as an array formula. Instructions follow t

of y-values predicted along that line or curve at your actual data points. You can then compare the predicted

ween the actual y-values and the average of the y-values. When the const argument = FALSE, the total sum

earity because any redundant X column can be expressed as a sum of multiples of the non-redundant X colu

data points and const = TRUE or omitted, then v1 = n df 1 and v2 = df. (If const = FALSE, then v1 = n df

Excel to obtain the probability that an F value this high occurred by chance. For example, FDIST(459.753674

endent variables can be tested for statistical significance in a similar manner. The following are the t-observe

hen compare the predicted values with the actual values. You may want to chart them both for a visual comp

ment = FALSE, the total sum of squares is the sum of the squares of the actual y-values (without subtracting t

of the non-redundant X columns. The LINEST function checks for collinearity and removes any redundant X c

st = FALSE, then v1 = n df and v2 = df.) The FDIST function with the syntax FDIST(F,v1,v2) will return

example, FDIST(459.753674, 4, 6) = 1.37E-7, an extremely small probability. You can conclude, either by find

following are the t-observed values for each of the independent variables.

alues (without subtracting the average y-value from each individual y-value). Then regression sum of square

removes any redundant X columns from the regression model when it identifies them. Removed X columns c

DIST(F,v1,v2) will return the probability of a higher F value occurring by chance. In this example, df = 6 (c

can conclude, either by finding the critical level of F in a table or by using the FDIST function, that the regres

n regression sum of squares, ssreg, can be found from: ssreg = sstotal - ssresid. The smaller the residual sum

hem. Removed X columns can be recognized in LINEST output as having 0 coefficients in addition to 0 se valu

IST function, that the regression equation is useful in predicting the assessed value of office buildings in this

The smaller the residual sum of squares is, compared with the total sum of squares, the larger the value of th

ents in addition to 0 se values. If one or more columns are removed as redundant, df is affected because df

ue of office buildings in this area. Remember that it is critical to use the correct values of v1 and v2 that were

es, the larger the value of the coefficient of determination, r2, which is an indicator of how well the equation

t, df is affected because df depends on the number of X columns actually used for predictive purposes. For d

or of how well the equation resulting from the regression analysis explains the relationship among the variab

r predictive purposes. For details on the computation of df, see Example 4. If df is changed because redunda

changed because redundant X columns are removed, values of sey and F are also affected. Collinearity sho

o affected. Collinearity should be relatively rare in practice. However, one case where it is more likely to aris

here it is more likely to arise is when some X columns contain only 0 and 1 values as indicators of whether a

articular group. If const = TRUE or is omitted, the LINEST function effectively inserts an additional X column

rts an additional X column of all 1 values to model the intercept. If you have a column with a 1 for each subj

lumn with a 1 for each subject if male, or 0 if not, and you also have a column with a 1 for each subject if fem

th a 1 for each subject if female, or 0 if not, this latter column is redundant because entries in it can be obtai

se entries in it can be obtained from subtracting the entry in the male indicator column from the entry in t

column from the entry in the additional column of all 1 values added by the LINEST function.

EST function.

FV

NPV

PV

IRR

RATE

PMT

Printing Formulas

FV

FV(rate,nper,pmt,pv,type)

Rateistheinterestrateperperiod.

Nperisthetotalnumberofpaymentperiodsinanannuity.

Pmtisthepaymentmadeeachperiod;itcannotchangeoverthelifeoftheannuity.Pmt must be

Pvisthepresentvalue,orthelump-sumamountthataseriesoffuturepaymentsisworthrightno

Typeisthenumber0or1andindicateswhenpaymentsaredue.Iftypeisomitted,itisassumedt

PV

PV(rate,nper,pmt,fv,type)

Rate istheinterest rate per period. For example, if you obtain an automobile loan at a 10 pe

Pmtisthepaymentmadeeachperiodandcannotchangeoverthelifeoftheannuity.Pmt must b

Fvisthefuturevalue,oracashbalanceyouwanttoattainafterthelastpaymentismade.Fv mus

Typeisthenumber0or1andindicateswhenpaymentsaredue.Iftypeisomitted,itisassumedt

NPV

NPV(rate,value1:value29),+cashinvestment

Rateistherateofdiscountoverthelengthofoneperiod.

value1: value29are1to29periodsrepresentingincome.

+cash investment representsthecashinvestmentfortheproject.

Example:

Example:=NPV(F9,C10:C14),+C9

F9containstherequiredrateofreturn

C10:C14containsthepostivecashflowgeneratedbytheprojecteachperiod

+C9containsthecashinvestmentrequiredbytheproject.The cash investment must be entered

RATE

RATE(nper,pmt,pv,fv,type,guess)

Nperisthetotalnumberofpaymentperiodsinanannuity.

Pmtisthepaymentmadeeachperiodandcannotchangeoverthelifeoftheannuity.

Pmt must be entered as a negative amount.

Fvisthefuturevalue,oracashbalanceyouwanttoattainafterthelastpaymentismade.Iffvis

Typeisthenumber0or1andindicateswhenpaymentsaredue.Iftypeisomitted,itisassumedt

Guessisyourguessforwhattheratewillbe.If you omit guess, it is assumed to be 10 percent.

NPER

NPER(rate,pmt,pv,fv,type)

Rateistheinterestrateperperiod.

Pmtisthepaymentmadeeachperiod;itcannotchangeoverthelifeoftheannuity.Pmt must be

Pvisthepresentvalue,orthelump-sumamountthataseriesoffuturepaymentsisworthrightno

Fvisthefuturevalue,oracashbalanceyouwanttoattainafterthelastpaymentismade.

Typeisthenumber0or1andindicateswhenpaymentsaredue.Iftypeisomitted,itisassumedt

PMT

PMT(rate,nper,pv,fv,type)

ForamorecompletedescriptionoftheargumentsinPMT,seePV.

Rateistheinterestratefortheloan.

Nperisthetotalnumberofpaymentsfortheloan.

Pvisthepresentvalue,orthetotalamountthataseriesoffuturepaymentsisworthnow;alsokn

Fvisthefuturevalue,oracashbalanceyouwanttoattainafterthelastpaymentismade.Iffvis

Typeisthenumber0or1andindicateswhenpaymentsaredue.Iftypeisomitted,itisassumedt

IRR

IRR(values,guess)

Valuesisanarrayorareferencetocellsthatcontainnumbersforwhichyouwanttocalculateth

Values must contain at least one positive value and one negative value to calculate the inter

IRRusestheorderofvaluestointerprettheorderofcashflows.Besuretoenteryourpaymenta

Ifanarrayorreferenceargumentcontainstext,logicalvalues,oremptycells,thosevaluesareig

GuessisanumberthatyouguessisclosetotheresultofIRR.

MicrosoftExcelusesaniterativetechniqueforcalculatingIRR.Startingwithguess,IRRcycles

InmostcasesyoudonotneedtoprovideguessfortheIRRcalculation.Ifguessisomitted,itisa

IfIRRgivesthe#NUM!errorvalue,oriftheresultisnotclosetowhatyouexpected,tryagain

Printyourcompletedworksheet.

TodisplayformulaspresstheCtrland~keysatthesametime.The~keyisgenerallylocatedatt

OntheExcelmenu,gotoFile,PageSetupandclickontheSheettabasshownbelowtocheckthe

NowclickonthePagetabinPageSetup.ClickthebuttonnexttoFit1pagewideby1pagetall.

ThenclickthePrintPreviewbutton.Ifthewidthoftheworksheetisgreaterthanthelengthofthe

ClickOKtoclosethePageSetupscreenandthenPrinttheworksheet.

Toreturntheworksheettonormalview,presstheCtrland~keysagain.

mitted,itisassumedtobe0whichrepresentsattheendoftheperiod.Ifpaymentsaredueatthebeginning

obile loan at a 10 percent annual interest rate and make monthly payments, your interest rate per mo

you get a four-year car loan and make monthly payments, your loan has 4*12 (or 48) periods. You wo

mitted,itisassumedtobe0whichrepresentsattheendoftheperiod.Ifpaymentsaredueatthebeginning

mentismade.Iffvisomitted,itisassumedtobe0(thefuturevalueofaloan,forexample,is0).

mitted,itisassumedtobe0whichrepresentsattheendoftheperiod.Ifpaymentsaredueatthebeginning

ed to be 10 percent. If RATE does not converge, try different values for guess. RATE usually converg

mentismade.

mitted,itisassumedtobe0whichrepresentsattheendoftheperiod.Ifpaymentsaredueatthebeginning

isworthnow;alsoknownastheprincipal.

mentismade.Iffvisomitted,itisassumedtobe0(zero),thatis,thefuturevalueofaloanis0.

mitted,itisassumedtobe0whichrepresentsattheendoftheperiod.Ifpaymentsaredueatthebeginning

uwanttocalculatetheinternalrateofreturn.

enteryourpaymentandincomevaluesinthesequenceyouwant.

ls,thosevaluesareignored.

thguess,IRRcyclesthroughthecalculationuntiltheresultisaccuratewithin0.00001percent.IfIRRcan'

guessisomitted,itisassumedtobe0.1(10percent).

uexpected,tryagainwithadifferentvalueforguess.

generallylocatedatthetopleftofthekeyboard.

wnbelowtochecktheGridlinesandRowandcolumnheadingsboxes.

ewideby1pagetall.

thanthelengthoftheworksheet,clicktheSetupbuttonandchangetheorientationoftheworksheettoLan

ntsaredueatthebeginningoftheperiod,typeshouldbe1.

your interest rate per month is 10%/12, or 0.83%. You would enter 10%/12, or 0.83%, or 0.0083, into

12 (or 48) periods. You would enter 48 into the formula for nper.

ntsaredueatthebeginningoftheperiod,typeshouldbe1.

rexample,is0).

ntsaredueatthebeginningoftheperiod,typeshouldbe1.

ntsaredueatthebeginningoftheperiod,typeshouldbe1.

ueofaloanis0.

ntsaredueatthebeginningoftheperiod,typeshouldbe1.

00001percent.IfIRRcan'tfindaresultthatworksafter20tries,the#NUM!errorvalueisreturned.

onoftheworksheettoLandscape.IfthelengthoftheworksheetisgreaterthanthewidthusethePortraito

rorvalueisreturned.

thewidthusethePortraitoreintation.

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