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Using the NPV function in Excel is a bit tricky because of the way the function is implemented. By default, it is assumed that an investment is made one period before thevalue1date. For this reason, an NPV formula in its pure form works right only if you supply the initial investment c...
Fortunately, Excel’s PV function (see Figure 3 and the worksheet “PV”) can be used to compute the present value of an annuity. The syntax of the PV function is PV(Rate,Nper,Payment,Future_value,Type). Rate is the discount rate. Nper is number of periods (the discount rate must ...
What is the internal rate of return? What is the internal rate of return for a 5-year annuity that pays $250 a year and sells for $1100? Suppose an investment project costs $1,000 and generates a profit stream of $100 per year and lasts forever. What is the ...
How would I compare 3 projects - two have an NPV = $500,000 (over 9 years mixed stream of inflows and 20 years annuity, respectively) and one which is a lump of $490,000 cash right now?... 16 1 comments NPV of $1 Million for a Project Means What ...