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The Corporate Finance Institute Excel

Example 2 – IFS vs nested IF function

Prior to the introduction of the IFS function, we used to use nested IF function.

Let’s see how the IFS function is superior to nested IF. Let’s assume we wish to

give discounts to customers based on their total purchases from us. So, a

customer would get 5% discount for purchases more than $100 but less than

$500, 10% discount if he made purchases of more than $500 but less than

$750, 20% if he made purchases of more than $750 but less than $1,000 and

30% for all purchases above $1,000.

Let’s see the formula when we would have used nested IF function:

Now, let’s see how it becomes easy to write the formula for same results using

IFS:

Hence, IFS is easier as it allows using a single function to input a series of

logical tests. It becomes cumbersome in the nested IF function, especially when

we use a large number of logical tests.

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