How much will our money be worth in the future? Calculating the future and present value of the cash flow is a complex mathematical process. Today it’s easy, because Excel has a class of functions that only deal with this area. Sometimes, in order to facilitate the assessment of the justification of the investment, the so-called “Financial tables” containing discount rates were used to calculate values for the given interest rates and time periods.
The customer’s lifetime is the period in which we perform sales transactions, and the calculation of its value is a profit forecast based on the relationships that are mutually achievable. There are several ways to calculate it, and all of them show us profit flow that we can expect by retaining a customer. In other words, how much money comes if they pay regularly, if they are financed, and if a certain percentage of customers goes from year to year.
Excel has a multitude of financial functions. I’m not sure how many of them can be applied in Serbian business environment, but they are useful when making complex calculations. Financial investment planning functions aim to answer the question: how much will, under the given conditions, be worth my money after a certain period of time? That is, if I borrow money to someone how much I will come? Or, if we lend money for how much it will cost me?