|Introduction: Calculates the NPV of certain of the stepped rate functions.|
Functions in the Projections NPV families are of two basic types. They are either basic PV... functions or they are PV....Q functions, where Q stands for "quick".
The reason for the difference is that in most simple projections functions there are two basic ways of calculating the Present Value of cashflow stream.
- Direct Annuity Math. There are formulae for various kinds of annuity, and these can be applied to the more simple of the projections functions, but they require you to assume evenly spaced cashflows, which means that different daycount methods cannot be used. Instead, a PmtsPerYear parameter is used, which is like a simplified daycount. You can specify payments in advance or arrear on an "n" payments-per-year basis, but you can"t specify uneven periods or business days. Functions using this method are designated the PV...Q functions.
- Full Discounted CashFlow. In these functions the cashflow is re-created internally, then complete assumptions about daycount can be used, and so DayCount and CashBasis can be used in all their options. Functions designated PV... ( ie without the ...Q suffix) use this more exact but longwinded method.