Calculating Net Present Value And Net Future Value - HP 10bII+ User Manual

Table 8-5 Editing cash flows
Keys
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1JG::yÆ1G
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Calculating Net Present Value and Net Future Value

The net present value (NPV) function is used to discount all cash flows to the front of the time
line using an annual nominal interest rate that you supply.
To calculate NPV or NFV:
]O:
1. Press
2. Enter the cash flow data.
3. Store the annual nominal interest rate in I/YR and press
4. If you have just calculated NPV, press
Example: A Discounted Contract, Uneven Cash flows
You have an opportunity to purchase a contract with the following cash flows:
and store the desired number of periods per year in P/YR.
\«
Table 8-6 Example of a contract with uneven cash flows
End of Month Amount
4 5,000.00
9 5,000.00
10 5,000.00
15 7,500.00
25 10,000.00
Display Description
3 2.00 Inputs new cash flow
amount and repeat value.
Displays the new repeat
value, 2.00, for CF
Inputs new cash flow, CF
and repeat value.
4 is displayed first, with
no value followed by
4 - 1 ,200, then 4 2.00
3,600.00 Displays total of the cash
flows.
0.00 Exit the editor.
58.97 Calculate the new annual
yield.
\½
to calculate NFV.
.
3
,
4
.
Cash Flow Calculations
95