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60
60
Section 4: Additional Financial Functions
Section 4:
Additional Financial Functions
60
60
Section 4:
Section 4:
Additional Financial Functions
Additional Financial Functions
Example: An investor has an opportunity to buy a duplex for $80,000 and would
Example:
Example:
Example:
like a return of at least 13%. He expects to keep the duplex 5 years and then sell it
for $130,000; and he anticipates the cash flows shown in the diagram below.
NPV
Calculate
to determine whether the investment would result in a return or a
loss.
Note that although a cash flow amount ($4,500) occurs twice, these cash flows
not
are
consecutive. Therefore, these cash flows must be entered using the method
described above.
Keystrokes
Keystrokes
Keystrokes
Keystrokes
fCLEARH
80000ÞgJ
500ÞgK
4500gK
5500gK
4500gK
130000gK
:w
13¼
fl
NPV
Since
is positive, the investment would increase the financial value of the
investor's assets.
Display
Display
Display
Display
0.00
Clears financial and storage registers.
–80,000.00
Stores
negative cash flow).
–500.00
Stores
negative cash flow).
4,500.00
Stores
5,500.00
Stores
4,500.00
Stores
130,000.00
Stores
5.00
Checks number of cash flow amounts
entered (in addition to
13.00
Stores
212.18
NPV.
CF
(with minus sign for a
0
CF
(with minus sign for a
1
CF
.
2
CF
.
3
CF
.
4
CF
.
5
CF
).
0
i.
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