Example: Value Of A Lease With Uneven Payments - Texas Instruments BA II PLUS User Manual

Computing NPV
Use an interest rate per period (
To
Access interest rate variable
Enter interest rate per period.
Compute net present value.
Answers:
NPV
Computing IRR
To
Access .
IRR
Compute internal rate of return.
is 52.71%.
Answer: IRR

Example: Value of a Lease with Uneven Payments

A lease with an uneven payment schedule usually accommodates
seasonal or other anticipated fluctuations in the lessee's cash position.
A 36-month lease has the following payment schedule and beginning-of-
period payments.
Number of Months
4
8
3
9
2
10
If the required earnings rate is 10% per 12-month period with monthly
compounding:
• What is the present value of these lease payments?
48
is $7,266.44.
) of 20%.
I
Press
(
!
20
# %
Press
)
# %
Payment Amount
$0
$5000
$0
$6000
$0
$7000
Display
I= 0.00
I=
20.00
NPV=
7,266.44
Display
IRR= 0.00
IRR=
52.71
Cash Flow Worksheet


