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View Full Version : Calculation of IRR and NPV Equation


tlo819
Mar 2, 2007, 06:13 PM
Please help me with the equation calculations.
If the project is (10,000),
year 1 10,000 how do I 1. Set this up in excel and 2. solve via equation

12thManFan
Mar 8, 2007, 08:36 AM
Please help me with the equation calculations.
If the project is (10,000),
year 1 10,000 how do I 1. Set this up in excel and 2. solve via equation
In excel, just type the following formula:

=NPV(rate, cash flow 1, cash flow 2, etc... )

In your case, cash flow 1 is -10,000 (cost to get into project)

In equation, it's just:

NPV = -(initial CF) + CF1/(1+r) + CF2/(1+r)^2 + etc...