Microsoft Office Tutorials and References
In Depth Information
Chapter 6: Appreciating What You’ll Get, Depreciating What You’ve Got
Chapter 6
Appreciating What You’ll Get,
Depreciating What You’ve Got
In This Chapter
Determining what an investment is worth
Using different depreciation methods
Evaluating business opportunities
Money makes the world go ’round, so the saying goes. I have a new one:
Excel functions make the money go ’round. Excel has functions that
let you figure out what an investment will be worth at a future date. We all
know it’s a good thing to look for a good interest rate on an investment. With
the FV (Future Value) function, you can take this a step further and know
how much the investment will be worth down the road.
Have you ever wondered what to do with some extra money? You can put
it in the bank, you can pay off a debt, or you can purchase something. Excel
helps you figure out the best course of action by using the IRR (Internal Rate
of Return) function. The IRR function lets you boil down each option to a
single value that you can then use to compare opportunities and select the
best one.
For the business set, Excel has a number of functions to help create
depreciation schedules. Look no further than the SLN, SYD, DB, and DDB functions
for help in this area. Brush up on these, and you can talk shop with your
accountant!
SLN is a function used to calculate straight line deprecation. SYD is a function
to calculate sum-of-years’ digits depreciation. DB and DDB are variations of
the declining balance method of depreciation.
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