Question

XNPV is a function in EXCEL that helps us calculate an NPW of a project using a discount rate and a series of cash flows occurring at irregular intervals. In Business, cash flows mostly occur at irregular intervals, so XNPV is widely used in business. Calculate XNPV of the following project, if the project's cost of capital is 8%. (Please search online about XNPV) Date Cash flows S3,000,000 240,000 500,000 600,000 600,000 Oct 11-2019 Dec 25-2019 Dec 25-2020 Dec 25-2021 Dec 25-2022 600,000 July 1-2023 Dec 25-2024 600,000

Answer 1

Step 1 :-

Insert the values of discount rate , cash flows and dates .

A B C D Rate 8% 1 2 Values Dates -3000000 10/11/2019 4 240000 12/25/2019 5 500000 12/25/2019 6 600000 12/25/2021 7 600000 12/25/2022 8 6000007/1/2023 600000 12/25/2024 10 11 XNPV 12 13 14 15 3

Step 2 :-

Use the Excel formula :-

= XNPV ( rate, values, dates )

Where C1 represents the discount rate

B4:B10 represents cash flows over a period of time

C4:C10 represents dates for the respective cash flows

And press enter

С E F A В D Rate 8% Values Dates 4 -3000000 10/11/2019 240000 12/25/2019 5 6 500000 12/25/2019 7 600000 12/25/2021 8 600000 12/25/2022 9 600000 7/1/2023 10 600000 12/25/2024 11 XNPV(C1 ,B4:B10,C4: С10) XNPV 12 13 14 LL 123