Cash-Flow Calculations

i% = periodic interest rate.

j= the group number of the cash flow.

CFj = amount of the cash flow for group j.

nj = number of times the cash flow occurs for group j.

k= the group number of the last group of cash flows.

Nj = ∑ nl = total number of cash flows prior to group j.

1 ≤ l < j

 

 

 

 

 

 

 

 

 

 

 

 

 

k

 

⎛

1

–

⎛

1 + -------i%⎞ –nj⎞

NPV = CF

 

+

∑

CF

⎜

 

 

⎝

100⎠

⎟

 

⋅ ⎜

-------------------------------------

 

i%

⎟

 

0

 

j

⎜

 

 

 

⎟

 

 

 

j = 1

 

⎝

 

 

 

-------

⎠

 

 

 

 

 

 

 

 

100

⋅

⎛

1

i%

⎞ –nj

⎝

+ -------

 

 

 

100⎠

When NPV = 0, the solution for i% is the periodic internal rate of return.

k

NFV = NPV x SPFV(i % : N) where N = ∑ nj

k

j = 1

 

TOTAL = ∑ (nj ⋅ CFj)

j = 0 k

COUNT = ∑ nj

j = 0

Appendix B: More About Calculations III