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X-Hacker.org- Nanforum Toolkit v2.1 Reference Guide - <b>ft_netpv()</b> http://www.X-Hacker.org [<<Previous Entry] [^^Up^^] [Next Entry>>] [Menu] [About The Guide]
 FT_NETPV()
 Calculate net present value
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 Syntax

      FT_NETPV( <nInitialInvestment>, <nInterestRate>, <aCashFlow> ;
                [, <nNoOfCashFlows> ] ) -> nNetPV

 Arguments

     <nInitialInvestment> is the amount of cash invested for purposes
     of generating the cash flows.

     <nInterestRate> is the annual interest rate used to discount
     expected cash flows (10.5% = 10.5, not .105).

     <aCashFlow> is an array of the expected cash receipts each year.

     <nNoOfCashFlows> is the number of years cash flows are expected
     (optional, Len( aCashFlow ) ).

 Returns

     The difference between the initial investment and the discounted
     cash flow in dollars.

 Description

     This function calculates the net present value, the difference
     between the cost of an initial investment and the present value
     of the expected cash flow(s) from the investment.  The present
     value of the expected cashflow(s) is calculated at the specified
     interest rate, which is often referred to as the "cost of capital".

     This function can be used to evaluate alternative investments.
     The larger the NPV, the more profitable the investment.  See
     also the FutureValue and PresentValue for further explanations.
     The formula to calculate the net present value is:

     NetPresentValue = SUM(CashFlow[i] / ((1 + InterestRate) ** i))
                       FOR i = 1 TO NoOfCashFlows

 Examples

     nNetPresentValue := FT_NETPV(10000, 10, { 10000,15000,16000,17000 } )

 Source: NETPV.PRG

 Author: David Husnian

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