IFRS Excel Formulas (3)
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www.ifrsbox.com IRR Formula Year Cash flows 0 300,000 1 -100,000 2 -80,000 3 -80,000 4 -70,000 Total -30,000 IRR: 4.16% Q: ABC acquired a machine under the finance lease. Machine normally co EUR 300 000. ABC pays for machine with 4 payments: at the end of 1s year - 100 000, at the end of 2nd and 3rd year - 80 000 and at the of 4th year - 70 000. What is the interest rate implicit in the lea A: Interest rate implicit in the lease = internal rate of return. See calculation below. Double click here to review IRR formula
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IFRS Excel Formulas
Transcript of IFRS Excel Formulas (3)
www.ifrsbox.com IRR Formula
Year Cash flows0 300,0001 -100,0002 -80,0003 -80,0004 -70,000
Total -30,000
IRR: 4.16%
Q:ABC acquired a machine under the finance lease. Machine normally costs EUR 300 000. ABC pays for machine with 4 payments: at the end of 1st year - 100 000, at the end of 2nd and 3rd year - 80 000 and at the end of 4th year - 70 000. What is the interest rate implicit in the lease?
A:Interest rate implicit in the lease = internal rate of return. See calculation below.
Double click here to review IRR formula
www.ifrsbox.com NPV Formula
Year Cash flows0 -200,0001 35,0002 35,0003 35,0004 28,0005 28,0006 28,0007 28,0008 28,0009 28,000
10 -10,000Total 63,000
Discount rate: 5%
NPV: 11,373.91
Q:ABC wants to build new asset and assumes the following cash flows from it: initial investment = 200 000, revenues in years 1-3 = 35 000 p.a., revenues in years 4-9 = 28 000 p.a., asset removal costs in the year 10 = 10 000. ABC requires the rate of return of 5% on its investment. Determine whether the project is feasible or not.
A:We will calculate NPV at 5% for ABC's cash flows from the project. As seen from calculation, NPV>0, so the project is feasible.
Double click here to review NPV formula
www.ifrsbox.com YIELD Formula
Parameter name: Value: Comment:Settlement date: January 12, 2012 Date of purchase, or date of closing the accounts
Maturity date: October 9, 2015 Bond's final maturity date
Rate: 5.50% Coupon or interest rate
Price: 93.40 Bond's market price per 100 USD of face value
Redepmtion: 100.00 Bond's redemption value per 100 USD of face value; if at par, then it is 100
Frequency: 1 Number of coupon/interest payments per year
Basis: 4 Type of day count; I usually use European (n. 4), which is 30/360
YIELD: 7.58%
Q:On 12 January 2012, ABC acquires untraded corporate bonds issued by XY with the following parameters: nominal price = 100 000, redemption at par, interest rate: 5.5% p.a., interest paid 1xyear, maturity date: 10 October 2016, market price: 93 400.Calculate ABC's rate of return on this bond at the purchase.A:Rate of return on XY's bond = its yield. See calculation below.
Double click here to review YIELD formula
www.ifrsbox.com YIELD Formula
Bond's redemption value per 100 USD of face value; if at par, then it is 100
Type of day count; I usually use European (n. 4), which is 30/360
