Zero or negative rates and XNPV?

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LAHM - 20 Mar 2006 16:38 GMT

Hi,

Does anybody know why XNPV appears not to accept negative rates?

e.g. using the example in the Excel 2003 help: (i.e. amounts = -10000,
2750, 4250, 3250, 2750, dates = 01 Jan 2008, 01 Mar 2008, 30 Oct 2008,
15 Feb 2009, 01 Apr 2009) returns #NUM! for rates 0 or below. That is
=XNPV(0,amounts, dates). However when I composed a VBA function to
duplicate the formula for XNPV, as shown in the help, the value is 3000
when the rate is zero.

thanks,
L.

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Niek Otten - 20 Mar 2006 16:58 GMT

=IF(A1-B1<0,"-","")&TEXT(ABS(A1-B1),"hh:mm")

If you want to calculate with it, use just =A1-B1. It will not show the way you want, but further calculations are correct.

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Kind regards,

Niek Otten

> Hi,
>
[quoted text clipped - 9 lines]
> thanks,
> L.

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Niek Otten - 20 Mar 2006 17:07 GMT

Sorry, posted reply to another question!

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Kind regards,

> =IF(A1-B1<0,"-","")&TEXT(ABS(A1-B1),"hh:mm")
>
[quoted text clipped - 13 lines]
>> thanks,
>> L.

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Daniel CHEN - 20 Mar 2006 17:16 GMT

Your VBA code is right.
If rate = 0, the NPV should be $3000.
If you use 0.0000001 as rate for XNPV function, you also get 3000.
Excel, or Microsoft makes XNPV function work only for positive rate - that's
normal in real world.

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Best regards,
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Yongjun CHEN
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> Hi,
>
[quoted text clipped - 9 lines]
> thanks,
> L.

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LAHM - 20 Mar 2006 17:49 GMT

Thanks for your reply, that's what I suspected, but it's surprising
that Excel doesn't mention this in the help. On a related matter, do
you think that the XNPV function would be used or called by the XIRR
function? The reason I ask is because it might explain why XIRR, in the
case of a cashflow which has two possible solutions, one of which is
negative, always appears to return the higher result?

Rgds,

Lachlan.

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