Cash Flows Inflation Adjusted

[Jes Johansen]

Can anyone assist with this:

I have annual cash flows that are based on tenure of a building lease. The
cash flows are stable and I want to calculate the total cumulative value of
those annually adjusted cash flows.

Say for instance the cash flow in year 1 is 100 and inflation is 3% then the
cash flow in year 10 is 134, which is reach with either of these two formulas:

=100*POWER(1+3%,10)
=100*(1+3%)^10

Instead of entering the values these can of course be linked to other cells.

Both formulas will give me the value in year 10, but not the cumulative
total of the CF for the in-between years. Is there a formula for calculating
this other than calculating the annual CF in separate cells and then
including part of these in an ‘IF=’ function?

 

[Ashish Mathur]

Hi,

You can use the following array formula (Ctrl+Shift+Enter)

=SUM((B2:B9)*(1+$D$10)^ROW(H1:H8))

B2:B9 has the original cash flows. D10 has 3%. Please ensure that the
reference specified between ROW() always start from row 1 and goes till the
number of cash flows in the persio ii.e. since there are 8 case flows, the
reference goes from 1:8.

--
Regards,

Ashish Mathur
Microsoft Excel MVP
www.ashishmathur.com

 

[Shane Devenshire]

Hi,

Try this

=SUMPRODUCT(100*(1+3%)^ROW(1:10))

If this helps, please click the Yes button

Cheers,
Shane Devenshire