Examples of NPV and IRR Calculations using Excel (by Ali Aslam)

Each of these examples corresponds to the Summary of Financial Functions reviewed in the
Using the Financial Wizard Guide.
Click on the red corners of the the cells to view the Excel argument used. In general there are two
basic methods of writing Excel arguments:
1. Referring to the series of cells containing cash flows.
2. Explicitly referring to the cash flows using brackets.
Click on the red corners of the NPV and IRR examples below to see each of these methods.

Net Present Value:

discount rate
year 1
year 2
year 3
value at maturity

10%
bond payments/cash flows
600
700
800
10000

NPV

$8,555.15

Internal Rate of Return

Cash Flows
stock purchase price
-10000
year 1
350
year 2
450
stock selling price
12500
IRR

Err:504