Financial Toolbox | ![]() ![]() |
Present or Future Values
The toolbox includes functions to compute the present or future value of cash flows at regular or irregular time intervals with equal or unequal payments: fvfix
, fvvar
, pvfix
, and pvvar
. The -fix
functions assume equal cash flows at regular intervals, while the -var
functions allow irregular cash flows at irregular periods.
Now compute the net present value of the sample income stream for which you computed the internal rate of return. This exercise also serves as a check on that calculation because the net present value of a cash stream at its internal rate of return should be zero. Enter
which returns an answer very close to zero. The answer usually is not exactly zero due to rounding errors and the computational precision of the computer.
![]() | Interest Rates/Rates of Return | Depreciation | ![]() |