In certain cases, you may need to use a function as one of the arguments of another function. For example, the following formula uses a nested AVERAGE function and compares the result with the sum of two column values.
=AVERAGE([Cost1], SUM([Cost2]+[Discount]))
Valid returns When a function is used as an argument, it must return the same type of value that the argument uses. For example, if the argument uses Yes or No, then the nested function must return Yes or No. If it doesn't, the list displays a #VALUE! error value.
Nesting level limits A formula can contain up to eight levels of nested functions. When Function B is used as an argument in Function A, Function B is a second-level function. For instance, the SUM function is a second-level function because it is an argument of the AVERAGE function. A function nested within the SUM function would be a third-level function, and so on.
Note Lists do not support the RAND and NOW functions. The TODAY and ME functions are not supported in calculated columns, but are supported in the default value setting of a column.