http://www.financeassignment.blogspot.comSoftware IntroductionTopic for the assignment relating to subject Introduction to Business finance is “Find any computer program to calculate NPV and IRR and also learn to use it.” So the topic asks about any sort of software which is made for calculating NPV and IRR. There are so many software made for calculating NPV and IRR, we can also calculate NPV and IRR by using the interface of MS-EXCEL, but other software provide us greater ease and supportability for using formulas.So the Software, I have used for Calculating Net Present Value (NPV) and Internal Rate of Return (IRR) is “SolveIT!, The financial Calculator”. The Graphical User Interface for the software can be seen in figure shown below.Solve!IT, The Financial Calculator

There are six categories in this software, which are:1. Financial calculators2. Depreciation calculators3. Loan calculators4. Schedules – Cash Flows5. General calculators6. Advisors

These are briefly described one by one:1. Financial calculators

It includes some of the basic finance formulas which are Compound & Simple Interest Calculator, Return on Investment Calculator, Equivalent Rate Calculator, Internal Rate of Return Calculator (IRR), Net Present Value Calculator(NPV), Payment Required Calculator, and Present Value of an Amount Calculator.

2. Depreciation calculators It includes formulas relating to depreciation. These are Declining Balance Depreciation Calculator, MACRS Calculator, Straight Line Depreciation Calculator, and Sum of Years Depreciation Calculator.

3. Loan calculators It includes formulas relating to Loan calculation. These are Accelerated Payment Calculator, Affordable House, Balloon Payment Calculator, Bridge Loan Calculator, Loan Calculator, Remaining Balance Calculator.

4. Schedules – Cash Flows It includes formulas relating to Schedules – Cash Flows calculation. These are Annuity Schedule, Future Value (FV) Schedule, Present Value (PV) of a Series Schedule, Rental Analysis Schedule, and Flexible Amortization Schedule. 5. General CalculatorsIt includes formulas relating to General calculation. These are Bond Calculator, Budget Calculator, Economic Ordering Quantity Calculator, Gross Profit Calculator, Net worth Calculator, Purchasing Power Calculator, and Weighted Average Calculator.

6. AdvisorsIt includes formulas relating to calculations which are necessary for Advisors and through these formulas Advisors take decisions. These are Break Even Advisor, Lease vs Buy Advisor, Loan Comparison Advisor, and Refinance Advisor.

Calculating Net Present Value (NPV)One method of evaluating the feasibility of a capital expenditure decision is to use the Net Present Value (NPV) method of evaluation. The present value of the cash flows (both positive and negative values can be entered) are determined using the MINIMUM rate of return (Discount Rate) on an investment that you will accept. The calculated result, if positive, tells you that you are exceeding your minimum requirements and a negative value tells you that you are not achieving your objective.

 Enter the initial amount. Since it is assumed that this will be the initial investment which is a cash outflow, it should be entered as a negative value. Enter the Total Periods and Initial Date and set the payment frequency (Payment Period). The cash flow input fields will be updated or created according to the inputs you enter. Enter each projected cash flow. Usage Note: When entering cash flows, the arrow keys will move the cell pointer from cell to cell. Additionally, if the menu choice {Preferences}{Tab key moves cell to cell in grid...} is checked, then [Tab] will move the cell pointer left to right and [Shift][Tab] will move it from right to left. Otherwise, if it is not checked, [Tab] will move the focus to the next control i.e. the 'Calc' button.Solved Problem from Final Paper of B.Com (H) P-IIIXYZ firm is planning to invest in manufacturing plant that costs purchase a new manufacturing plan that costs Rs.777000/- and its future cash flow is Rs.103300/- for year one, Rs.198400/- for year two, Rs.238000/- for year three, Rs.263000/- for year four and Rs.296000/- for year five. Evaluate the investment proposal by applying, NPV and IRR methods of capital budgeting when the interest rate is 8%, required payback period is 5 year and RRR is 10%?The problem is solved in Figure:

The Solved Figures of problem are:Net Present Value Calculator Initial Amount?: (Rs.777,000.00)Discount Rate? (%): 8.000Total Periods? (#): 5Initial Date?: 05/29/09Payment Period?: Annually

05/29/10 Rs 103,300.0005/29/11 Rs 198,400.0005/29/12 Rs 238,000.0005/29/13 Rs 263,000.0005/29/14 Rs 296,000.00

Net Present Value: Rs 72,318.66Total Invested (-outflows): (Rs 777,000.00)Total Return (+inflows): Rs 1,098,700.00Net Cash Flow: Rs 321,700.00

Calculating Internal Rate of Return (IRR)The Internal Rate of Return (IRR) will take you to the bottom line of an investment. It tells you the annualized rate of return on a complicated series of cash flows. Measure this against what you can earn in a risk-free investment to determine the desirability of this investment.In technical terms, IRR is the discount rate that sets all cash inflow and outflow to 0. More weight is given to the earlier cash flow than to the later cash flow because of the time value of money.Usage Note : When entering cash flows, the arrow keys will move the cell pointer from cell to cell. Additionally, if the menu choice {Preferences} is checked, then [Tab] will move the cell pointer left to right and [Shift][Tab] will move it from right to left. Otherwise, if it is not checked,Solved Problem from Final Paper of B.Com (H) P-IIIXYZ firm is planning to invest in manufacturing plant that costs purchase a new manufacturing plan that costs Rs.777000/- and its future cash flow is Rs.103300/- for year one, Rs.198400/- for year two, Rs.238000/- for year three, Rs.263000/- for year four and Rs.296000/- for year five. Evaluate the investment proposal by applying, NPV and IRR methods of capital budgeting when the interest rate is 8%, required payback period is 5 year and RRR is 10%?

The problem is solved in Figure:

Internal Rate of Return Calculator

Initial Investment?: (Rs.777,000.00)Total Periods? (#): 5Initial Investment Date?: 05/29/2009Periodic Cash Flow?: AnnuallyEstimated IRR (guess)?: 10.00

05/29/2010 Rs.103300.0005/29/2011 Rs.198400.0005/29/2012 Rs.238000.0005/29/2013 Rs.263000.0005/29/2014 Rs.296000.00 Internal Rate of Return (IRR) (%): 10.9940Total Invested (-outflows): (Rs.777, 000.00)Total Return (+inflows): Rs.1,098,700.00Net Cash Flow Over 5 Years: Rs.321,700.00