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Present Value Calculations


Posted by HOMEgoddess on February 02, 2001 5:50 AM

When calculating the present value of a dollar amount, I can't seem to get the formula to take into consideration the time element. I enter the payment as 806, but the payment is not made until the 3, 4, and 5th year. How do I get the formula to consider the payment will not be made during years one, and two?

Any help with this would be greatly appreciated!


Posted by Scott R on February 02, 2001 9:34 AM

For uneven cash flows, use NPV. Enter consecutive annual cash flows in A1:A5--
0,0,-806,-806,-806, in your case. NPV(10%,A1:A5)= -1,656.53

Posted by Scott R on February 02, 2001 9:35 AM

For uneven cash flows, use NPV. Enter consecutive annual cash flows in A1:A5--
0,0,-806,-806,-806, in your case. NPV(10%,A1:A5)= -1,656.53