Quote:
Originally Posted by dexoey
Hi to all,
I am new user, have an urgent question and I wonder if you help me by. I am going to convert different costs during life time of a product to Net Present Worth (NPW), consisting Maintenance and Rehabilitation costs (M&Rj) and Salvage Value (SV), according to the following formula:
https://www.dropbox.com/s/38aeqvrz0w...%20Formula.jpg
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 |
If the numbers in tadPV formula listed in my last post seem meaningless, then let me show you what each of the values in the formula represent.
If the M&R costs begin immediately then the following values would be placed in the Excel PV function
http://tadxl.com/excel_pv_function.html that is part of tadXL add-in
http://tadxl.com/
RATE: 3%
GRADIENT: 0%
TAXRATE: 0%
NPER: =20/5
PMT: $(1,000)
FV: 0
TYPE: 1
GTYPE: 1
COMPOUNDING: 1
PERIOD: 5
DISTRIBUTION: 1
GPERIOD: 1
=tadPV( 3%, 0%, 0%, 20/5, -1000, 0, 1, 0, 1, 5, 1 )
$3,248.56
Yet if the costs begin at the end of first period then the following values would used in the formula to find net present worth.
RATE: 3%
GRADIENT: 0%
TAXRATE: 0%
NPER: =20/5
PMT: $(1,000)
FV: 0
TYPE: 0
GTYPE: 1
COMPOUNDING: 1
PERIOD: 5
DISTRIBUTION: 1
GPERIOD: 1
=tadPV( 3%, 0%, 0%, 20/5, -1000, 0, 0, 0, 1, 5, 1 )
$2,802.24
In both instances we are defining the period having a length of 5 years by giving value of 5 to the variable called PERIOD.
We are then telling the tadPV formula that the number of periods are 4 by giving NPER a value of 20/5. That is twenty years divided by the lenght of each period.
This sort of calculation is not possible with Excel's own PV function due to the reasons mentioned in my last post. Only tadXL offers extended TVM functions of RATE, GRADIENT, NPER, PMT, PV and FV that permit performing time value of money calculations in various scenarios.