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Finance

  

cashflows

  

present value of a list of cash flows

 

Calling Sequence

Parameters

Description

Examples

Compatibility

Calling Sequence

cashflows(flows, rate)

Parameters

flows

-

list of cash flows, one per period, starting at period = 1

rate

-

interest rate per period

Description

• 

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].

Examples

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:

withfinance:

cashflows100,200,50,0.1

293.7640872

(1)

If these cash flows are generated from an initial investment of 95 units, the net present value is

95+cashflows100,200,50,0.1

198.7640872

(2)

Since the net present value (npv) is positive, the project would be accepted on that basis.

What is the internal rate of return?

npv95+cashflows100,200,50,r

npv95+100r+1+200r+12+50r+13

(3)

fsolvenpv=0,r,0..2

1.147236683

(4)

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

plotnpv,r=0..2

It is prudent to do this plotting, since it is possible to have multiple solutions to the IRR relationship (npv=0).

Compatibility

• 

The Finance[cashflows] command was introduced in Maple 15.

• 

For more information on Maple 15 changes, see Updates in Maple 15.

See Also

Finance

Finance[CashFlowAnalysis]

Finance[CashFlows]

Finance[presentvalue]