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6. (11.4) (I/Y)
7.
(FV)
J.
Calculating the net present value (NPV) of a series of equal or uneven cash flows using
the cash flow (CFj) register.
Example: Jane thinks if she invests $80,000 by buying property today, she can get $15,000 in rent
from it for each of the next twenty years (the rent will be paid quarterly). If she wants a rate of return
of 12% (with quarterly discounting) o n her investment, what is the net present value of this project?
Keystrokes
Clear all memory.
1.
(OS) (C ALL)
2.
(4) (OS) (P/YR) (C)
3.
(80000) (+/-) (CFj)
4.
(1) (OS) (Nj)
5.
(15000) (÷) (4) (=) (CFj)
6.
(4) (x) (20) (=) (OS) (Nj)
7.
(12) (I/Y)
8.
(OS) (NPV)
11.4
-13,986.35
Display
0.00
0.00
-80,000.00
1.00
3,750.00
80.00
12.00
33,252.86
Enter the annual interest rate
of 11.4%.
Computes the future value of
a $2,000 beginning -of-the-
period annuity earning 11.4
percent annual interest for 5
years.
Description
Clears Time-Value-of-Money
worksheet.
Sets the frequency of
compounding to four times
per year and clears the
register.
Inputs initial cash outflow.
Stores the frequency with
which the initial outflow of
$80,000 occurs.
Stores the quarterly cash
inflow.
Stores the number of
quarterly rent payments to be
received.
Stores the annual interest
rate.
Calculates the net present
value of the investment.
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