present value of a list of cash flows
list of cash flows, one per period, starting at period = 1
interest rate per period
The function cashflows computes the present value of a list of cash flows. The flows are given one per period, starting at period 1.
Since cashflows used to be part of the (now deprecated) finance package, for compatibility with older worksheets, this command can also be called using finance[cashflows]. However, it is recommended that you use the superseding package name, Finance, instead: Finance[cashflows].
I will receive 100 units, 200 units and 50 units at the end of this year, and at the end of the next 2 years. If the discount rate is 10%, this is equivalent to receiving immediately the amount of:
If these cash flows are generated from an initial investment of 95 units, the net present value is
Since the net present value (npv) is positive, the project would be accepted on that basis.
What is the internal rate of return?
npv ≔ −95+cashflows⁡100,200,50,r
The internal return is 115%. Since this is bigger than the discount rate the project would be also be accepted on the IRR basis. One can see the npv versus rate by plotting
It is prudent to do this plotting, since it is possible to have multiple solutions to the IRR relationship (npv=0).
The Finance[cashflows] command was introduced in Maple 15.
For more information on Maple 15 changes, see Updates in Maple 15.
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