Financial modeling best practices require calculations to be transparent and auditable. The trouble with piling all the calculations into a formula is that you can’t easily see what numbers go where or what numbers are user inputs or hard-coded. You can set this up in Excel to...
IRR is calculated using an iterative process in Microsoft Excel. It runs through the calculations starting with a guess until the result is accurate to within 0.00001%. The syntax for IRR calculation in excel is: IRR (values,[guess]) To determine the internal rate of return, values must ha...
A histogram is a chart that plots the proportion of observations that fall within a host of category ranges. For example, in the chart below, the three-year rolling annualized average performance of the S&P 500 Index for the period of June 1, 1979, through June 1, 2009, has been construc...
Let’s say that we have an alternative low-risk investment that would give us a 10 percent annualized return on the money. Are we better off buying the gas station or taking our virtually assured 10 percent return? I used a Texas Instruments BA-35 calculator to do these discounted cash ...