HP -18C Owner's Manual page 86

Figure 5·3. Simple Cash Flows
Money received is a
posit ive number 200
300
200
250
' *
Time
~ r---~--~~--~---4----4---~----+---~
""
Money paid out is a
negative number
Equal periods
Initial
flow= -700
The horizontal line represents time. The line is divided into equal
compounding periods. The vertical lines represent the cash flows. For
money received, the line points up; for money paid out, the line
points down . In this case, the investor has invested $700, and this
investment has generated a series of cash flows, starting at the end of
the first period. Notice that there is no cash flow (a cash flow of 0) for
period five, and that the investor
pays
a small amount in period six.
Figure 5-4 illustrates a cash flow diagram in which two series of con-
secutive, equal cash flows occur. Consecutive, equal cash flows are
called
grouped cash flows .
Figure 5·4. Grouped Cash Flows
Initial
Flow(1) = - 100
# Times (Number
of times) = 5
flow= - 100 -100 -100 - 100 -100 -100
84 5: Cash Flow Calculations
Flow(3) = 1 ,950
6
Flow(2) = - 200
# Times = 3
7 8
- 200 -200 - 200
9