Present value of varying cash flow

```
PresentVal = pvvar(CashFlow, Rate, CFDates)
```

| A vector of varying cash flows. Include the initial investment
as the initial cash flow value (a negative number). If |

| Periodic interest rate. Enter as a decimal fraction.
If |

| (Optional) A vector of serial date numbers or date strings
on which the cash flows occur. Specify |

`PresentVal = pvvar(CashFlow, Rate, CFDates)`

returns
the net present value of a varying cash flow. Present value is calculated
at the time the first cash flow occurs.

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]; CFDates = ['01/12/1987' '02/14/1988' '03/03/1988' '06/14/1988' '12/01/1988']; PresentVal = pvvar(CashFlow, 0.09, CFDates)

returns

PresentVal = 142.16

The net present value of the same investment under different discount rates of 7%, 9%, and 11% is obtained in a single call:

PresentVal = pvvar(repmat(CashFlow,3,1)', [.07 .09 .11], CFDates)

pv = 419.0136 142.1648 -122.1275

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