Financial Toolbox™

pvvar - Present value of varying cash flow

Syntax

PresentVal = pvvar(CashFlow, Rate, IrrCFDates)

Arguments

`CashFlow`	A vector of varying cash flows. Include the initial investment as the initial cash flow value (a negative number).
`Rate`	Periodic interest rate. Enter as a decimal fraction.
`IrrCFDates`	(Optional) For irregular (nonperiodic) cash flows, a vector of dates on which the cash flows occur. Enter dates as serial date numbers or date strings. Default assumes `CashFlow` contains regular (periodic) cash flows.

Description

PresentVal = pvvar(CashFlow, Rate, IrrCFDates) returns the net present value of a varying cash flow.

Examples

This cash flow represents the yearly income from an initial investment of $10,000. The annual interest rate is 8%.

Year 1	$2000
Year 2	$1500
Year 3	$3000
Year 4	$3800
Year 5	$5000

To calculate the net present value of this regular cash flow

PresentVal = pvvar([-10000 2000 1500 3000 3800 5000], 0.08)

returns

PresentVal =

             1715.39

An investment of $10,000 returns this irregular cash flow. The original investment and its date are included. The periodic interest rate is 9%.

Cash Flow	Dates
($10000)	January 12, 1987
$2500	February 14, 1988
$2000	March 3, 1988
$3000	June 14, 1988
$4000	December 1, 1988

To calculate the net present value of this irregular cash flow

CashFlow = [-10000, 2500, 2000, 3000, 4000];

IrrCFDates = ['01/12/1987'
              '02/14/1988'
              '03/03/1988'
              '06/14/1988'
              '12/01/1988'];

PresentVal = pvvar(CashFlow, 0.09, IrrCFDates)