HP -18C Owner's Manual page 89

• To calculate net present value
(111& ),
net uniform series
(l I B ),
and/or net future value ( . . ):
1.
Key in the periodic interest rate, expressed as a percentage,
and
press . . .
2.
Press the menu key(s) for the calculation(s) you want to do.
Table 5-2. The CALC Menu for CFLO Lists
Menu Key Description
IDi1I
Calculates the sum of the cash flows .
...
Calculates the internal rate of return~the interest (discount)
rate at which the net present value of the cash flows equals
O. For conventional investments', the investment is attractive
if IRR% is greater than the cost of capital.
..
Stores the periodic interest rate, expressed as a percentage
(sometimes called cost of capital, discount rate
, or required
rate of return) .
111&
Calculates the net present value-the present value of a se-
ries of cash flows plus the initial cost of the investment,
computed for a specified periodic interest rate.
l I B
Calculates the net uniform series-the dollar amount of regu-
lar, equal cash flows having a present value equivalent to the
net present value .
..
Calculates the net future value of a series of cash flows , cal-
culated by finding the future value of the net present value .
• Conventional investments meet four criteria-(1) the initial cash flow is negative, (2) some
flows following the initial flow are positive, (3) the sequence of cash flows changes sign only
once, and (4) the sum (TOTAL) of the cash flows is positive.
5: Cash Flow Calculations 87