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when using excel.... what is used to meadure the worth of a stream of cash flows,...

when using excel....
what is used to meadure the worth of a stream of cash flows, taking into acclunt the time value of money?
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Answer #1

Present Value of Uneven Cash Flows

NPV(Rate,Cash Flow 1,Cash Flow 2,Cash Flow 3, ...)

Now, select B11 and type: =NPV(B1,B5:B9) and you will see that the answer is $1,000.18. Make a special note of the fact that we did not include the period 0 cash flow in the function. The NPV function has no way of knowing when a cash flow occurs, so it assumes that the first cash flow in the range occurs one period in the future. If we had included a period 0 cash flow, then the function would have given us the present value as of one period ago (i.e., period -1).

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