pv of a perpetuity due
Present & Future Value
calculate pv in excel
Present Value Mixed Streams?
How can you compare the calculated PV in light of the fact that the undiscounted cash flow totals $150,000 in each case?????
15%
Cash Flow Stream
year a b
1 …………. 50,000 ……….10,000
2 …………..40,000 ………. 20,000
3 ………… 30,000………. 30,000
4 ………… 20,000 ………. 40,000
5 …………..10,000 ………. 50,000
Totals ..150,000 …….. 150,000
For “A” using financial tables total NPV is $109,856.33 and using Excel an function the total NPV is $109,856.33
For “B” using financial tables total NPV is $91,290.00 and using Excel an function the total NPV is $91,272.98
HELP!!!!!
you have answered your question. You compare $109.9K vs $91.3K. Given the choice you would select Option A as this yields the higher result, reflecting the fact that you have a higher amount of $$ in the early period of the cash flow stream.
How To… Calculate Net Present Value (NPV) in Excel 2003
