Section 3: Basic Financial Functions
Example 2: A development company would like to purchase a group of
condominiums with an annual net cash flow of $17,500. The expected holding
period is 5 years, and the estimated selling price at that time is $540,000.
Calculate the maximum amount the company can pay for the condominiums in
order to realize at least a 12% annual yield.
Stores PMT. Unlike in the previous
problem, here PMT is positive
since it represents cash received.
Sets payment mode to End.
The maximum purchase price to
provide a 12% annual yield. PV
is displayed with a minus sign
since it represents cash paid out.