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K.
Calculating the internal rate of return (IRR) of a series of equal or uneven cash flows
using the cash flow (CFj) register.
Example: ABC Inc. is planning to spend $35,000 to buy a warehouse. Under the contract, the y will
receive an after-tax cash flow of $6,000 (paid semiannually) from the property for the next eight
years. What is the internal rate of return for the investment?
Keystrokes
Clear all memory.
1.
(OS) (C ALL)
2.
(2) (OS) (P/YR) (C)
3.
(35000) (+/-) (CFj)
4.
(1) (OS) (Nj)
5.
(6000) (÷) (2) (=) (CFj)
6.
(8) (x) (2) (=) (OS) (Nj)
7.
(OS) (IRR/YR)
L.
Bond valuation:
Example: How much would you be willing to pay for a bond today if it pays $100 in interest annually
for 20 years (starting next year), and has a principal payment of $1,000? The yield to maturity is 15%.
Display
0.00
0.00
-35,000.00
1.00
3,000.00
16.00
7.97
Description
Clears Time-Value-of-Money
worksheet.
Sets the frequency of
compounding to twice per
year and clears the register.
Inputs initial cash outflow.
Stores the frequency with
which the initial outflow of
$35,000 occurs.
Stores the quarterly cash
inflow.
Stores the number of
quarterly rent payments to be
received.
Computes the internal rate of
return of the investment.
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