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Cash Flow Series, Factors, Excel Formulas - Coggle Diagram
Cash Flow Series
Equal Payments Cash Flow
Transactions in which a uniform series of payments exists. (rental payments, bond interest payments, and commercial installment plans)
How much money will you have if you invest $x at the end of each year of N years at an interest rate of i?
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Factors
Capital Recovery Factor
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Referred to as the annuity factor and indicates a series of payments of a fixed, or constant, amount for a specified number of periods.
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Sinking Fund Factor
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A “Sinking Fund” is an interest-bearing account into which a fixed sum is deposited each interest period; it is commonly established for the purpose of replacing fixed assets or retiring corporate bonds.
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Present Worth Factor
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What would you have to invest now in order to withdraw A dollars at the end of each of the next N periods?
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Excel Formulas
NPV Function
NPV(interest rate, value at end of t = 1, value at end of t = 2...) + investment at t = 0
FV Function
FV(rate, # of periods, payment amount, [present value])
PMT Function
PMT(rate, # of periods, present value, [future value])