I need to use PV instead of NPV in Excel. However I am not able to understand why it gives different values
I have a case where in I need 17,00,000 (end of 1st year) increased by 6% every year for 24 more years (so total 25 years). When I discount it using NPV with 10% rate, I get 2,56,64,794. However for this I have to use many cells for 17,00,000 compounding for 24 years and then discount with NPV for 25 years.
However I need to get the calculation done with PV.
So for this I get real rate of return i.e.(10%-6%)/(1+6%)
However when I use the PV formula with this rate and PMT as 17,00,000 (end of period payments), I get the value 2,72,04,681
Why do I get 2 different values? What am I missing here?
I need to get PV (as i need to lessen the calculations required) same as the NPV but cant wrap my head around the difference in results.
Thanks to @cbcalvin, got the answer by breaking down the cash flows year by year.
PV is used for fixed cash flows in fututre whereas my requirement was for increasing PMT value.
Use of NPV is wider, however in my case it gave a steadily increasing PMTs.
For beginning of Year 1 values for both PV and NPV come to same when subtracted 17,00,000. Thus I get the following result in a single cell (marked in yellow) rather than calculating for every year and then discounting using NPV.
My case was for end of period. For start of period it works straight forward without any changes to either formulas just by taking right interest rates.
- Constrain a Specman list so it doesn't have identical values in consecutive elements
- How to type cast a list of uint to a list of vr_ahb_data in Specman?
- Static fields/methods in e
- What is the difference between deep_copy and gen keeping in Specman?
- Specman UVM: What is the difference between write_reg { .field == 2;}; and write_reg_fields?
- Does Specman support optional parameters to a method?
- Specman e: When colon equal sign ":=" should be used?
- Specman e: Is there a way to know how many values there is in an enumerated type?
- Specman e error: No match for file when using "for each line in file"
- How to run e file one by one? Not in parallel test
- Specman/e constraint (for each in) iteration
- Specman e: How driver's items queue can be locked from a sequence?
- Specman e: How to print variable's address?
- Specman e: "keep type .. is a" fails to refine the type of a field
- Specman soft select on variable, decimal vs. hexadecimal values
- Specman e: How to print a pointer to a struct?
- Specman e: Is there a way to print unit instance name?
- Specman e: simultaneous events error
- Specman e coverage: ignored values appear in the coverage statistics
- Specman e: How a sequence should be started when gen_and_start_main constrained to FALSE?
- Specman/e list of lists (multidimensional array)
- Does Specman e have struct constructor?
- Specman e: How the predefined sequence.item should be used?
- Specman e: define-as-computed macro error
- Specman e UVM: Why to inherit from uvm_* units?
- Specman e: A sequence drives its BFM also its MAIN was not defined in a test
- e HVL (IEEE 1647): expect expression fails unexpectedly
- Specman e subtyping: How to refer to FALSE value of conditional field in when/extend subtyping?
- e HVL (IEEE 1647): How to set 'X' value?
- Difference between declaring an event that is sensitive to a simple_port value and event_port