GNOME Bugzilla – Bug 22381
NPV documentation
Last modified: 2010-01-05 04:10:43 UTC
1. IRR documentation: The documentation might indicate the default guess. I didn't check the source but I assume some adaptation of Newton's method is used. There are two reasons the user may need to supply an initial guess. The algorithm may not converge with the default initial guess. There may be multiple solutions. It is more than just a lark that the other spreadsheet allows this optional argument. (What would be really nice would be for the user to specify an upper limit and then for the function to return all "physical" solutions less than the limit...probably too hard to eliminate mathematical pathologies.) 2. NPV documentation and definition: The documentation should indicate the first cash flow is discounted. Incidentally, the first cash flow, traditionally negative ought NOT be discounted--the value of future cash flows is "netted out" against the initial investment, hence NET present value. 3. PV documentation and implementation: This is a basic financial function so the documentation should be completed asap. The "type" argument should be optional and should default to "0"--like the function "rate", for example. 4. PMT documentation: Although the function appears to work correctly, the documentation is in error. (PMT is not a present value but the annuity payment that justifies its present value.) Mark Copper ------- Additional Comments From terra@diku.dk 2000-08-30 18:19:47 ---- Subject: Contributions for IRR/NPV/PV/PMT doc. From: Morten Welinder <terra@diku.dk> To: 22381-done@bugs.gnome.org Message-Id: <20000830221947.3435.qmail@tyr.diku.dk> Date: 30 Aug 2000 22:19:47 -0000 [Re. http://bugs.gnome.org/db/22/22381.html] It looks like you have a pretty good idea about what needs to be improved here. Would you mind coming up with a proposal for actual text? Morten ------- Bug moved to this database by debbugs-export@bugzilla.gnome.org 2001-01-27 12:33 ------- This bug was previously known as bug 22381 at http://bugs.gnome.org/ http://bugs.gnome.org/show_bug.cgi?id=22381 Originally filed under the Gnumeric product and general component. The original reporter (ad8854@wayne.edu) of this bug does not have an account here. Reassigning to the exporter, debbugs-export@bugzilla.gnome.org. Reassigning to the default owner of the component, jgoldberg@home.com.
Reassigning for Kevin.
Jody, could you take a look at this bug and make the fixes?
Jody, I just got a "response" from bugzilla re old financial function suggestions, documentation mostly. I sat here updating the situ in the "additional comments" window and then lost the whole thing (I think). Since v1 is out I thought it might be helpful to review the basic financial functions. As I say, it's 99% mopping up. There are seven functions I'm calling basic: PV: doc needs example FV: in doc, prototype "term" should be changed to "nper" for consistency with other functions; prototype should also indicate the last two arguments are optional and what their default values are. also needs example. PMT: doc needs example RATE: no documentation at all--probably because, like IRR, there are situations where there are actually 2 rates (eg. rate(2,260,-100,-445)) and it is only in cases like this where the rate function might need to be helped with a different initial guess than the default. NPER: I haven't checked Excel, but I'm surprised the last two arguments (fv and type) are not optional. NPV: would be nice if Formula Guru labeled the first entry as the rate. IRR: like "rate" (but more importantly) there may be as many solutions as there are sign changes in the cash flows; suggest warning along with example like -100, 260, -165, (this is equivalent to the one for rate above), and note that the other rates may be found using sufficiently close initial guesses, the default being .1. Off the wall: it would be nice if PV were extended to allow an extra argument, g, such that pv = C(r-g)*(1-(1+g)^n/(1+r)^n). This gives the value of a constant growth annuity; in particular when the growth g is 0, you get the usual annuity formula back.
I have fixed the doc part of FV, except example. I've made NPER's last two args optional. Re. the rate functions: I would guess that the number of possible solutions can be as high as the number of points. Less if you cut out any <=100%. In practice, however, it seems that gnumeric (and XL) find the one you meant to find. Leaving this open for later.
Why does NPER raise a #DIV/0 error for a negative rate? OASIS is calling this a bug: http://www.oasis-open.org/committees/download.php/32469/OpenDocument-formula-20090508.odt p. 183.
That's a bizarre way of reporting bugs. Fixed: we now allow rates from -100% to 0% too. Rates below that makes no sense (and would require a different formula if we just want to solve some equation and call that the result).
It seems that the documentaion of NPV is still incomplete. The RATE function should be checked. I think those are the only 2 items left.
There is no RATE function...
Unless I am mistaken, there is nothing left here. If I missed something please open a new bug for it, preferably one bug for each function that has an issue. This problem has been fixed in the development version. The fix will be available in the next major software release. Thank you for your bug report.