Section 4: Additional Financial Functions | 61 |
Calculating NPV for Grouped Cash Flows. A maximum of 20 cash flow amounts (in addition to the initial investment CF0) can be stored in the hp 12c.* However, problems involving more than 20 cash flows can be handled if among the cash flows there are equal consecutive cash flows. For such problems, you merely enter along with the amounts of the cash flows the number of times — up to 99 — each amount occurs consecutively. This number is designated Nj, corresponding to cash flow amount CFj, and is entered using the akey. Each Nj is stored in a special register inside the calculator.
This method can, of course, be used for problems involving fewer than 20 cash flows — and it will require fewer storage registers than the method described above under Calculating NPV for Ungrouped Cash Flows. Equal consecutive cash flows can be entered using that method — provided there are enough storage registers available to accommodate the total number of individual cash flows. The facility of grouping equal consecutive cash flows is provided to minimize the number of storage registers required.
Note: When entering cash flow amounts — including the initial investment CF0 — remember to observe the cash flow sign convention by pressing Þ after keying in the amount for a negative cash flow.
In summary, to enter the amounts of the cash flows and the number of times they occur consecutively:
1.Press fCLEARHto clear the financial and storage registers.
2.Key in the amount of the initial investment, press Þ if that cash flow is negative, then press gJ. If there is no initial investment, press 0gJ.
3.If the initial investment consists of more than one cash flow of the amount entered in step 2, key in the number of those cash flows, then press ga. If gais not pressed, the calculator assumes that N0 is 1.
4.Key in the amount of the next cash flow, press Þ if that cash flow is negative, then press gK. If the cash flow amount is zero in the next period, press 0gK.
5.If the amount entered in step 4 occurs more than once consecutively, key in the number of times that cash flow amount occurs consecutively, then press ga. If gais not pressed, the calculator assumes that Nj is 1 for the CFj just entered.
6.Repeat steps 4 and 5 for each CFj and Nj until all cash flows have been entered.
With the amounts of the cash flows and the number of times they occur consecutively stored in the calculator, NPV can be calculated by entering the interest rate and pressing fl, just as described earlier.
*If you have stored a program in the calculator, the number of registers available for storing cash flow amounts may be less than 21.
File name: hp 12c_user's guide_English_HDPMBF12E44 | Page: 61 of 209 |
Printered Date: 2005/7/29 | Dimension: 14.8 cm x 21 cm |