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Crystal Reports Tools: Improve Performance While Saving Time and Money |
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Crystal Reports and Financials: NPV, #01
We all know that money has a value and that money in the bank now is worth more than the same amount at some point in the future. The NPV function takes a rate and series of cash payments and receipts to calculate what that cash flow is worth at the current point of time. Suppose your project has annual cash flows of $1000, $2000, $1500 and $1200 over the life of the project and your cost of capital is 5%. Then the cash flow function NPV (0.05, [1000, 2000, 1500, 1200]) This will calculate a value of $5049.44. This is less than the sum of the individual values as you have to wait for the payments. The rate is a decimal number and a 5% investment rate is entered as 0.05. The cash flows can be positive or negative numbers. Most projects have a large negative value at the start, and a series of positive returns over the life of the project.
This article is copyrighted by Crystalkeen, Mindconnection, and Chelsea Technologies Ltd. It may be freely copied and distributed as long as the original copyright is displayed and no modifications are made to this material. Extracts are permitted. The names Crystal Reports and Seagate Info are trademarks owned by Business Objects. |
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