| What the name means | "Present Value of an annual stream of cashflows"
| | Syntax | PVA ( NPVDate, DisAER, AnnualCashFlows, StartAnnDate, [DCountDisc], [StartDCF], [FinishDCF] )
| | Description | Calculates the Net Present Value of a series of annual cashflows. It is the simplest of the DCF (Discount Cash Flow) functions.
| | See Also | PVE (NPVDate, DisAER, EvenCashFlows, EvenTimeStart, EvenTimeInterval, [StartDCF], [FinishDCF]) | | PVM (AnnPmt, InterestAER, TermYrs, PmtsPerYear, [FVOpt]) | | PVT (NPVDate, DisAER, Dates, Cashflows, [DayCountDisc], [PrdsDisc], [StartDCF], [FinishDCF], [PVTOptions])
| | See also Excel functions | NPV (Related)
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| Variable | Type or Value | Description |
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Inputs: (7)
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| 1
| NPVDate
| Date
| The date to which the Net Present Value (NPV) is discounted.
|
| 2
| DisAER
| Float
| The discount rate expressed as an AER (Annual Equivalent Rate). See Annual Equivalent Rates.
|
| 3
| AnnualCashFlows
| Range of Floats (numbers)
| Annual cash flows, evenly spaced one year apart, the first one starting on StartAnnDate
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| 4
| StartAnnDate
| Date
| Start date of annual cash flows
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| 5
| DCountDisc
| Float (Optional)
| A single integer denoting the DayCount method used for determining time differences for discounting purposes. See Using Daycount.
(Optional)
|
| 6
| StartDCF
| Date (Optional)
| Optional Start Date for cashflows to be included in the DCF (PV or IRR) calculation. If omitted, all cashflows are included. Over-rides other Start dates in the function.
(Optional)
|
| 7
| FinishDCF
| Date (Optional)
| Optional Finish Date for cashflows to be included in the DCF (PV or IRR) calculation. If omitted, all cashflows are included. Over-rides other Finish dates in the function.
(Optional)
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Output:
|
| Return Value
| NPV
| Float
| The Net Present Value.
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Defaults and Values The variable(s) of this function have certain defaults and/or switch values associated with them. Click here to see more. | Type of Value | Value | Description | Detail | | Default(s)
| DCountDisc | 5 | | | Switches
| DCountDisc | 0 | 30/360 BMA (Bond Market Association, formerly the PSA)
| | | 1 | ACT/ACT (365 or 366)
| | | 2 | ACT/360: ActualDaysInPeriod / 360
| | | 3 | ACT/365: ActualDaysInPeriod / 365
| | | 4 | 30E/360: Also known as European 30/360. Standard bond literature definition.
| | | 5 | Decimal Year (ACTM/12): ActualMonths / 12
| | | 7 | 30/360 BMA (Bond Market Association, formerly the PSA)
| | | 8 | ACT (Non Leap)/365: Same as ACT/365 but ignoring Feb 29
| | | 9 | 30/365: Standard bond literature definition (same as 30/360 but with 365 denominator)
| | | 10 | 30/360 ISDA
| | | 11 | 30/360 ISDA + Feb Adj
| | | 12 | ISDA + Feb EOM Adj
| | | 13 | Brazilian ACTBD/252 |
Range Handling and ConstraintsThis function has range inputs that are subject to range handling procedures to help reduce input errors and increase flexibility and speed. Click here to see more. The variables affected are as follows (in order): | Variable | Type of Handling | Explanation | | AnnualCashFlows | Trailing Zero Size (one range) | If this range has trailing zeros, the range will be shortened to last non-zero element. So {0,20,0,30,0,0} would be shortened to {0,20,0,30}. |
Whats good or unique about it | | Like Excel's NPV function but with more options, notably allowing for a separate NPV date (not just the start of the cashflow) and allowing the use of (optional) Daycount options. | For Excel Experts | | This is similar to Excel's NPV function but is more specific. Excels function assumes end of year cash flows as the default which means that that the first cash flow is always discounted 1 year. PVA is more explicit in its assumption, forcing you to specify an NPVDate and a StartAnnDate so that there is no doubt as to the timing of your cash flows. Note however, that StartAnnDate is the date of the first cashflow. | Key Points | StartAnnDate
Note in the PVA and PVE functions, StartAnnDate is the date of the first cashflow. In the fairly similar NPVM function, StartAnnDate is the start date of the first period, because NPVM deals with cash flows occurring over time rather than at a discrete point. | | PVA takes into account daycount when determining the length of time between NPVDate and StartAnnDate , because this might be an inexact number of years. This is the only application of daycount in this function. Cash flows are discounted using traditional annuity formulae on an annual basis. | Mathematical Formula |  |
Examples | - Preview of the PVA example.
- The above spreadsheet can be accessed from the Quick Reference (on the Business Functions menu), on the Examples menu, or in the Business Functions\Component Examples directory
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