The cash flows generated from an investment can never be the same or even for the entire life of that investment. There will always exist some difference in the cash flow each year. It could be due to various reasons, say, changes in the economic cycle, increase/decrease in production, fluctuations in turnover and price, etc. Hence, the method of the present value of annuity does not work here. And this is where the role of the present value of uneven cash flows comes into play. PV of uneven cash flows calculator is developed to help one overcome the limitations of the present value of an annuity.
This calculator is made to simplify the complex calculation to arrive at the present value of uneven cash flows.
To know more about PV of uneven cash flows – Present Value of Uneven Cash Flows.
In order to find out the present value of uneven cash flows, put your values in the following formula:
CF for Year 1 (1 + r)1 + CF for Year 2 (1 + r)2 + CF for Year 3 (1 + r)3 + ……. + CF for Year n (1 + r)n
Where CF means Cash Flow for the respective years.
r = Discounting Rate
n = The period till calculation
Present Value of Uneven Cash Flows Calculator
How to Calculate using a Calculator?
Users have to input the following details into the calculator to obtain instant results.
Cash Flows – Cash flows of different periods are to be inserted against their respective columns. It could be either negative or positive.
Discounting Rate – It is the rate at which the cash flows are discounted to obtain their present values.