is there anyone who could tell me the details on how these two formulas
work?

I get some results that do not seem to fit, I mean the percentage is
totally odd.

I'd like to know how Excel calculates these values.

Maybe it's not even about Excel but about understanding of calculating
"Net Present Value" and Internal Rate of Return" in general....

NPV discounts future cash flows at a constant interest
rate that you define. IRR on the other hand is an
algorithim to solve for an discount rate that equates to
an NPV of zero.

There is more than 1 IRR solution if you have cash flows
that are positive and negative. For example if you have
negative for x periods, then postive for 1 period, then
negative, then positive for the rest of the period, there
could me more than one IRR value that will satisfy the to
an NPV of zero. As I recall the issue is related to
changing signs on the cashlfows.

There may be other reasons why IRR does not provide the
same result as when using NPV, but this is one of them.

Dave




-----Original Message-----
is there anyone who could tell me the details on how
these two formulas
work?

I get some results that do not seem to fit, I mean the
percentage is
totally odd.

I'd like to know how Excel calculates these values.

Maybe it's not even about Excel but about understanding
of calculating
"Net Present Value" and Internal Rate of Return" in
general....

.

Try HELP for NPV. The formula is given.

If your 2nd suggestion, i.e. what do these numbers mean, you can probably find
help if you search Google.

On 17 Feb 2005 12:25:35 -0800, "
wrote:

is there anyone who could tell me the details on how these two formulas
work?

I get some results that do not seem to fit, I mean the percentage is
totally odd.

I'd like to know how Excel calculates these values.

Maybe it's not even about Excel but about understanding of calculating
"Net Present Value" and Internal Rate of Return" in general....