Quote:
Originally Posted by dexoey
Hi to all,
SV occurs only once at the end of life time, itīs NPW in Excel can be calculated as following:
=PV(i discount, AP,0, SV,1)
but M&Rj costs occurs J time during life cycle, and formulating manually their mathematical formula most times takes much time. Exactly what should I write in the cell to get their total NPW? In other words, how can I get the following formula by Excel functions:
https://www.dropbox.com/s/nrcgo41j0b...ormula%202.jpg
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Reminder: NPW= FV( 1/(1+i Discount))^n
FV: future value
i Discount: discount rate
n: numbers of years (periods)
Thanks in advance |
As M&R costs occur every J period thus the Excel PV function may not be of help
The PV function and other 4 TVM functions in Excel make use of this equation
FV (1+RATE)^-NPER + PMT * (1+RATE*type) * [1 - {(1+RATE)^-NPER}] / RATE + PV = 0
You were able to solve for SV as this was the FV in the TVM equation
M&R are periodic but then occur each J period thus the PMT part of the TVM equation is unable to solve for this
However there are 3rd party Excel add-in programs such as tadXL that offer their own TVM functions. Such TVM functions have added values and one of which is the value for PERIOD
Here you can specify the length of the period and in this case N is the length of the period
This will let you to find present value for M&R using tadPV function
If M&R costs is in amount of $1000 and occurs every 5 years and the total number of periods were 20 then the following call to tadPV function would find the present value at 3% rate
=tadPV ( 3%, 0%, 0%, 20/5, -1000, 0, 0, 0, 1, 5, 1)