Apple iWork '09 - Manual (Page 350)

Irregular Cash Flows and Time Intervals
Some TVM problems involve irregular fixed periodic cash flows where cash flows occur
at regular time intervals but the amounts vary. Still other problems have cash flows
that have irregular time intervals where cash flows do not necessarily occur at regular
time intervals.
Function and its purpose Arguments used by the function
“IRR” (page 125) is the function to use if you wish
to determine a periodic rate such that the net
present value of a series of potentially irregular
cash flows that occur at regular time intervals is
equal to 0. This is commonly called the internal
rate of return. IRR solves for the argument
periodic-rate. flows-range, estimate
flows-range is a specified range of cash flows that
may implicitly include a payment, a present-value,
and a future-value.
“MIRR” (page 128) is the function to use if you
wish to determine a periodic rate such that
the net present value of a series of potentially
irregular cash flows that occur at regular time
intervals is equal to 0. MIRR differs from IRR
in that it permits positive and negative cash
flows to be discounted at a different rate. This is
commonly called the modified internal rate of
return. MIRR solves for the argument periodic-rate. flows-range, finance-rate, reinvest-rate
flows-range is a specified range of cash flows that
may implicitly include a payment, a present-value,
and a future-value.
finance-rate and reinvest-rate are specific cases of
periodic-rate.
“NPV” is the function to use if you wish to
determine the present value of a series of
potentially irregular cash flows that occur at
regular time intervals. This is commonly called the
net present value. NPV solves for the argument
present-value. periodic-rate, cash-flow, cash-flow…
cash-flow, cash-flow… is a specified series of one
or more cash flows that may implicitly include a
payment, present-value, and future-value.
Related Topics
For related functions and additional information, see:
“Regular Cash Flows and Time Intervals” on page 348
“Common Arguments Used in Financial Functions” on page 341
“Listing of Financial Functions” on page 96
“Value Types” on page 36
“The Elements of Formulas” on page 15
350 Chapter 13 Additional Examples and Topics