Table
Menu Label | Description |
OCalculates the sum of the cash flows.
t* !Calculates the internal rate of return―the interest (discount) rate at which the net present value of the cash flows equals zero.
u!Stores the periodic interest rate, expressed as a percentage (sometimes called cost of capital, discount rate, or required rate of return).
v!Given I%, calculates the net present value―the present value of a series of cash flows.
w!Given I%, calculates the net uniform series―the dollar amount of constant, equal cash flows having a present value equivalent to the net present value.
x!Given I%, calculates the net future value of a series of cash flows by finding the future value of the net present value.
*The calculations for internal rate of return are complex and may take a relatively long time. To interrupt the calculation, press any key. In certain cases, the calculator displays a message indicating that the calculation cannot continue without further information from you, or that there is no solution. Refer to appendix B for additional information about calculating IRR%.
About the Internal Rate of Return (IRR%). A “conventional investment” is considered attractive if IRR% exceeds the cost of capital. A conventional investment meets two criteria―(1) the sequence of cash flows changes sign only once, and (2) the sum (TOTAL) of the cash flows is positive.
Remember that the calculator determines a periodic IRR%. If the cash flows occur monthly, then IRR% is a monthly value, too. Multiply it by 12 for an annual value.
| 7: Cash Flow Calculations 101 |
File name : | Print data : 2003/7/11 |