KeysDisplay Description

:ÆY¤

4.00

Input fifth cash flow amount and

 

 

(CFn 4 flashes, then

repeat value.

 

disappears)

 

 

 

 

jV::ÆJ¤

(CFn 5 flashes, then

repeat value.

 

1.00

Input sixth cash flow amount and

 

disappears)

 

 

 

 

:Æd¤

9.00

Input seventh cash flow amount and

 

 

(CFn 6 flashes, then

repeat value.

 

disappears)

 

 

 

 

J::::ÆJ¤

1.00

Input eighth cash flow amount and

 

(CFn 7 flashes, then

repeat value.

 

disappears)

 

 

 

 

The cash flows that describe your prospective investment are now in the calculator. Press v¤. Press 1or Ato scroll through the list and verify the cash flows and the repeat value is entered correctly. Press Mto exit.

Now that you have entered the cash flows, store the interest rate and calculate the net present value and net future value.

Table 8-8 Calculating NPV and NFV

KeysDisplay Description

JVÒ

15.00

Store annual interest rate

 

 

 

 

\½

27,199.92

Calculate net present value of

 

stored cash flows.

 

 

 

\«

37,105.94

Calculate NFV of stored cash

 

flows.

 

 

 

This result shows that if you want a yield of 15% per year, you should pay 27,199.92 for the contract. Notice that this amount is positive. The net present value is simply the summed (or netted) value of a series of cash flows when they are discounted to the front of the time line.

Cash Flow Calculations 97