MS Excel spreadsheet can be used for carrying out engineering economic analysis such as Present Worth Analysis, Future Worth Analysis and Rate of Return. If cash flows throughout service life of alternatives and other related data is given, MS Excel can be conveniently used to carryout PW and FW analysis. The procedures are as follows:
PRESENT WORTH ANALYSIS
- PV function is used for this purpose.
- Syntax:
=PV(rate, nper, pmt, [fv], [type])
The PV function syntax has the following arguments:
- FV function is used for this purpose.
- Syntax:
=FV(rate, nper, pmt, [pv], [type])
The FV function syntax has same arguments as PV, however, instead of fv, pv is used.
Conclusion:
PV and FV function are quite helpful in increasing efficiency of our work. I'm attaching Example file where I have used PV function for carrying out PW analysis of a problem that I demonstrated in class today. Let me know if you have any questions. Cheers :)
PRESENT WORTH ANALYSIS
- PV function is used for this purpose.
- Syntax:
=PV(rate, nper, pmt, [fv], [type])
The PV function syntax has the following arguments:
- Rate Required. The interest rate per period (i)
- Nper Required. The total number of payment periods in an annuity (n)
- Pmt Required. The payment made each period and cannot change over the life of the annuity (A)
- Fv Optional. The future value, or a cash balance you want to attain after the last payment is made (F)
- Type Optional. The number 0 or 1 and indicates when payments are due. For end-of-period payment '0' is used while for beginning of period payment '1' is used.
- FV function is used for this purpose.
- Syntax:
=FV(rate, nper, pmt, [pv], [type])
The FV function syntax has same arguments as PV, however, instead of fv, pv is used.
Conclusion:
PV and FV function are quite helpful in increasing efficiency of our work. I'm attaching Example file where I have used PV function for carrying out PW analysis of a problem that I demonstrated in class today. Let me know if you have any questions. Cheers :)
PV in Excel - P1 |