Microsoft Office Tutorials and References
In Depth Information
Irregular Cash Flows
The difference between XNPV and NPV is that XNPV requires a series of dates to which the
values relate. In the example shown in Figure 12-18, the NPV of a series of irregular cash flows is
found using XNPV.
Figure 12-18: The XNPV function works with irregular cash flows.
The companion CD-ROM contains the workbook irregular cash flows.xlsx ,
which contains all the examples in this section.
The formula in cell B17 is
=XNPV(B3,B6:B15,A6:A15)
Similar to NPV, the result of XNPV can be checked by duplicating the cash flows and netting the
result with the first cash flow. The XNPV of the revised cash flows will be zero.
Unlike the NPV function, XNPV assumes that the cash flows are at the beginning of
each period instead of the end. With NPV, I had to exclude the initial cash flow from the
arguments and add it to the end of the formula. With XNPV, there is no need to do that.
Internal rate of return
The syntax for the XIRR function is
XIRR(value,dates,guess)
Just like XNPV, XIRR differs from its regular cousin by requiring dates. Figure 12-19 shows an
example of computing the internal rate of return on a series of irregular cash flows.

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