A Couple of Capital Budgeting Techniques using Microsoft Excel
Mason John O.
Abstract
Mason John O.
Abstract
Microsoft Excel has two functions that can be extremely valuable in capital budgeting. One is the NPV function, the other is the IRR function. The NPV function, which Excel refers to as the Net Present Value function, computes the present value of a series of periodic cash flows that are not necessarily the same amount each period. The IRR function computes the internal rate of return of an investment project.
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Microsoft Excel has two functions that can be extremely valuable in capital budgeting. One is the NPV function, the other is the IRR function. The NPV function, which Excel refers to as the Net Present Value function, computes the present value of a series of periodic cash flows that are not necessarily the same amount each period. The IRR function computes the internal rate of return of an investment project.
Key concepts: Internal rate of return, Capital budgeting, Net present value, Microsoft excel, Modified internal rate of return, Present value, Function (biology), Cash flow