Net Present Worth of reptitive costs?

[dexoey]

Hi to all

I am new user, have an urgent question and I wonder if you help me by
I am going to convert different costs during life time of a product t
Net Present Worth (NPW), consisting Maintenance and Rehabilitation cost
(M&Rj) and Salvage Value (SV), according to the following formula
https://www.dropbox.com/s/38aeqvrz0wrm9xc/NPW Formula.jp

SV occurs only once at the end of life time, it´s NPW in Excel can b
calculated as following

=PV(i discount, AP,0, SV,1

but M&Rj costs occurs J time during life cycle, and formulatin
manually their mathematical formula most times takes much time. Exactl
what should I write in the cell to get their total NPW? In other words
how can I get the following formula by Excel functions
https://www.dropbox.com/s/nrcgo41j0bg8sai/NPW Formula 2.jp

--------------------------------------------------------------------------------
Reminder: NPW= FV( 1/(1+i Discount))^
FV: future valu
i Discount: discount rat
n: numbers of years (periods)

Thanks in advanc

 

[Financial Engineer]

Hi to all

SV occurs only once at the end of life time, it´s NPW in Excel can b
calculated as following

=PV(i discount, AP,0, SV,1

but M&Rj costs occurs J time during life cycle, and formulatin
manually their mathematical formula most times takes much time. Exactl
what should I write in the cell to get their total NPW? In other words
how can I get the following formula by Excel functions
https://www.dropbox.com/s/nrcgo41j0bg8sai/NPW Formula 2.jp

--------------------------------------------------------------------------------
Reminder: NPW= FV( 1/(1+i Discount))^
FV: future valu
i Discount: discount rat
n: numbers of years (periods)


Thanks in advanc

As M&R costs occur every J period thus the Excel PV function may not b
of hel

The PV function and other 4 TVM functions in Excel make use of thi
equatio

FV (1+RATE)^-NPER + PMT * (1+RATE*type) * [1 - {(1+RATE)^-NPER}] / RAT
+ PV =

You were able to solve for SV as this was the FV in the TVM equatio

M&R are periodic but then occur each J period thus the PMT part of th
TVM equation is unable to solve for thi

However there are 3rd party Excel add-in programs such as tadXL tha
offer their own TVM functions. Such TVM functions have added values an
one of which is the value for PERIO

Here you can specify the length of the period and in this case N is th
length of the perio

This will let you to find present value for M&R using tadPV functio

If M&R costs is in amount of $1000 and occurs every 5 years and th
total number of periods were 20 then the following call to tadP
function would find the present value at 3% rat

=tadPV ( 3%, 0%, 0%, 20/5, -1000, 0, 0, 0, 1, 5, 1

 

[Financial Engineer]

Hi to all,

I am new user, have an urgent question and I wonder if you help me by
I am going to convert different costs during life time of a product t
Net Present Worth (NPW), consisting Maintenance and Rehabilitation cost
(M&Rj) and Salvage Value (SV), according to the following formula:
https://www.dropbox.com/s/38aeqvrz0wrm9xc/NPW Formula.jpg

SV occurs only once at the end of life time, it´s NPW in Excel can b
calculated as following:

=PV(i discount, AP,0, SV,1)

but M&Rj costs occurs J time during life cycle, and formulatin
manually their mathematical formula most times takes much time. Exactl
what should I write in the cell to get their total NPW? In other words
how can I get the following formula by Excel functions:
https://www.dropbox.com/s/nrcgo41j0bg8sai/NPW Formula 2.jpg

---------------------------------------------------------------------------------
Reminder: NPW= FV( 1/(1+i Discount))^n
FV: future value
i Discount: discount rate
n: numbers of years (periods)

Thanks in advance

If the numbers in tadPV formula listed in my last post seem meaningless
then let me show you what each of the values in the formula represent.

If the M&R costs begin immediately then the following values would b
placed in the Excel PV function http://tadxl.com/excel_pv_function.htm
that is part of tadXL add-in http://tadxl.com/

RATE: 3%
GRADIENT: 0%
TAXRATE: 0%
NPER: =20/5
PMT: $(1,000)
FV: 0
TYPE: 1
GTYPE: 1
COMPOUNDING: 1
PERIOD: 5
DISTRIBUTION: 1
GPERIOD: 1

=tadPV( 3%, 0%, 0%, 20/5, -1000, 0, 1, 0, 1, 5, 1 )
$3,248.56

Yet if the costs begin at the end of first period then the followin
values would used in the formula to find net present worth.

RATE: 3%
GRADIENT: 0%
TAXRATE: 0%
NPER: =20/5
PMT: $(1,000)
FV: 0
TYPE: 0
GTYPE: 1
COMPOUNDING: 1
PERIOD: 5
DISTRIBUTION: 1
GPERIOD: 1

=tadPV( 3%, 0%, 0%, 20/5, -1000, 0, 0, 0, 1, 5, 1 )
$2,802.24


In both instances we are defining the period having a length of 5 year
by giving value of 5 to the variable called PERIOD.

We are then telling the tadPV formula that the number of periods are
by giving NPER a value of 20/5. That is twenty years divided by th
lenght of each period.

This sort of calculation is not possible with Excel's own PV functio
due to the reasons mentioned in my last post. Only tadXL offers extende
TVM functions of RATE, GRADIENT, NPER, PMT, PV and FV that permi
performing time value of money calculations in various scenarios