CFI-Excel-eBook

Recommendations

Info

The Corporate Finance Institute ExcelFew things to remember about the PPMT Function:1. #NUM! error – Occurs if the given per argument is less than 0 or is greaterthan the supplied value of nper.2. VALUE! error – Occurs if any of the given arguments are non-numeric.3. An error can arise if we forget to convert the interest rate or the number ofperiods to months or quarters when calculating monthly or quarterlypayments. For the monthly rate, we need to divide annual rate by 12 andby 4 for the quarterly rate.corporatefinanceinstitute.com74
The Corporate Finance Institute ExcelXIRRGet the Internal Rate of Return (IRR) for aseries of cash flows that may not be periodicvalue dates guessWhat is the XIRR Function?The XIRR function is categorized under financial functions and will calculate theInternal Rate of Return (IRR) for a series of cash flows that may not be periodicby assigning specific dates to each individual cash flow. The main benefit ofusing the XIRR Excel function is that these unevenly timed cash flows can beaccurately modeled. To learn more, read why to always use XIRR over IRR inExcel modeling.In financial modeling, the XIRR function is useful in determining the value of aninvestment or understanding the feasibility of a project without periodic cashflows. It helps us understand the rate of return earned on an investment.Hence, it is commonly used in finance, particularly when choosing betweeninvestments.Formula=XIRR(values, dates,[guess])The formula uses the following arguments:1. Values (required argument) – It is the array of values that representthe series of cash flows. Instead of an array, it can be a reference to arange of cells containing values.2. Dates (required argument) – It is a series of dates that correspond tothe given values. Subsequent dates should be later than the first dateas the first date is the start date and subsequent dates are future datesof outgoing payments or income.3. [guess] (optional argument) – It is an initial guess of what the IRR wouldbe. If omitted, Excel takes the default value that is 10%.Excel uses an iterative technique for calculating XIRR. Using a changing rate(starting with [guess]), XIRR cycles through the calculation until the result isaccurate within 0.000001%.How to use the XIRR Function in Excel?To understand the uses of the XIRR function, let’s consider a few examples:corporatefinanceinstitute.com75
Page 1 and 2:
The Corporate Finance InstituteExce
Page 3 and 4:
The Corporate Finance Institute Exc
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24: The Corporate Finance Institute Exc
Page 25 and 26: The Corporate Finance InstituteExce
Page 73: The Corporate Finance Institute Exc
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Page 161 and 162:
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175 and 176:
Page 177 and 178:
Page 179 and 180:
Page 181 and 182:
Page 183 and 184:
Page 185 and 186:
Page 187 and 188:
Page 189 and 190:
Page 191 and 192:
Page 193 and 194:
Page 195 and 196:
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Page 203 and 204:
Page 205 and 206:
show all

CFI-Excel-eBook

Create successful ePaper yourself

Delete template?

Save as template?