Chapter 16
Building discount formulas
In this chapter, you will:
Learn how to calculate the present value
See various ways to discount cash flows, including calculating the net present value
Determine the payback period where you recoup an initial outlay
Calculate the internal rate of return for an investment
Chapter 15, “Working with investment formulas,” explains that investment calculations largely use the same time-value-of-money concepts as the loan calculations in Chapter 14, “Building loan formulas.” The difference is the direction of the cash flows. For example, the present value of a loan is a positive cash flow because the money comes to you; the present value of an investment is a negative cash flow because the money goes out ...
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