Formulas and Functions

Irregular Cash Flows and Time Intervals
Some TVM problems involve irregular xed periodic cash ows where cash ows occur
at regular time intervals but the amounts vary. Still other problems have cash ows
that have irregular time intervals where cash ows do not necessarily occur at regular
time intervals.
Function and its purpose Arguments used by the function
“IRR” (page 12 5 ) is the function to use if you wish
to determine a periodic rate such that the net
present value of a series of potentially irregular
cash ows that occur at regular time intervals is
equal to 0. This is commonly called the internal
rate of return. IRR solves for the argument
periodic-rate.
ows-range, estimate
ows-range is a specied range of cash ows that
may implicitly include a payment, a present-value,
and a future-value.
“MIRR” (page 12 8 ) is the function to use if you
wish to determine a periodic rate such that
the net present value of a series of potentially
irregular cash ows that occur at regular time
intervals is equal to 0. MIRR diers from IRR
in that it permits positive and negative cash
ows to be discounted at a dierent rate. This is
commonly called the modied internal rate of
return. MIRR solves for the argument periodic-rate.
ows-range, nance-rate, reinvest-rate
ows-range is a specied range of cash ows that
may implicitly include a payment, a present-value,
and a future-value.
nance-rate and reinvest-rate are specic cases of
periodic-rate.
“NPV” is the function to use if you wish to
determine the present value of a series of
potentially irregular cash ows that occur at
regular time intervals. This is commonly called the
net present value. NPV solves for the argument
present-value.
periodic-rate, cash-ow, cash-ow…
cash-ow, cash-ow… is a specied series of one
or more cash ows that may implicitly include a
payment, present-value, and future-value.
Related Topics
For related functions and additional information, see:
“Regular Cash Flows and Time Intervals” on page 348
“Common Arguments Used in Financial Functions” on page 341
“Listing of Financial Functions” on page 96
“Value Types” on page 36
“The Elements of Formulas” on page 15
350 Chapter 13 Additional Examples and Topics