HP 12C Financial 0012C-90001, 12C Financial 12C#ABA, 12C Financial F2231AA#ABA 0 = ∑CF, NPV = CF0, CF1, CF2, Calendar, Discounted Cash Flow Analysis, IRR, IRR, + CF, Actual Day Basis, 30/360 Day Basis, Net Present Value

Appendix D: Formulas Used 187

Discounted Cash Flow Analysis

Net Present Value

NPV	= net present value of a discounted cash flow.
CFj	= cash flow at period j.
NPV = CF0	+	CF1		+	CF2	+	... +	CFn
		(1	+ i)1		(1+ i)2			(1+ i)n

Internal Rate of Return

n= number of cash flows

CFj		= cash flow at period j.
IRR = Internal Rate of Return
k		⎡		− (1+ IRR)	−nj ⎤		⎡	− ∑ nq ⎤
0 = ∑CF		⋅ ⎢	1			⎥	⋅ ⎢(1	+ IRR) q <j ⎥	+ CF
				IRR
j=1	j	⎢				⎥	⎣	⎦	0
		⎣				⎦

Calendar

Actual Day Basis

∆DYS = f(DT2) – f(DT1) where

f(DT) = 365 (yyyy) + 31 (mm – 1) + dd + INTG (z/4) – x and

for mm ≤ 2 x = 0

z= (yyyy) – 1 for mm > 2

x = INTG (0.4mm + 2.3) z = (yyyy)

INTG = Integer portion.

Note: Additional tests are performed in order to ensure that the century (but not millennium) years are not considered leap years.

30/360 Day Basis

DAYS = f(DT2) – f(DT1)

f(DT) = 360 (yyyy) + 30mm + z for f(DT1)

if dd1 = 31 then z = 30 if dd1 ≠ 31 then z = dd1

for f(DT2)

if dd2 = 31 and dd1 = 30 or 31 then z = 30 if dd2 = 31 and dd1 < 30 then z = dd2

if dd2 < 31 then z = dd2

File name: hp 12c_user's guide_English_HDPMBF12E44	Page: 187 of 209
Printered Date: 2005/7/29	Dimension: 14.8 cm x 21 cm