Simple cash flow stream:
-4,000 outflow at 12/31/07
5,000 inflow at 12/31/08
2,000 inflow at 12/31/09
discount rate of 10% yields the following:
NPV = $1,998.50
XNPV = $2,198.35
Is this because XNPV is continuously compounding? Why is it different when distance between periods is the same?
Thanks in advance,
-4,000 outflow at 12/31/07
5,000 inflow at 12/31/08
2,000 inflow at 12/31/09
discount rate of 10% yields the following:
NPV = $1,998.50
XNPV = $2,198.35
Is this because XNPV is continuously compounding? Why is it different when distance between periods is the same?
Thanks in advance,