Discounted Cash Flow Analysis; Net Present Value; Internal Rate Of Return; Calendar - HP 12C User Manual

252 Appendix E: Formulas Used

Discounted Cash Flow Analysis

Net Present Value

NPV = net present value of a discounted cash flow.
= cash flow at period j.
CF
j
= +
NPV CF
0

Internal Rate of Return

n = number of cash flows
CF = cash flow at period j.
j
IRR = Internal Rate of Return
⎡
k
1
∑
= ⋅
⎢
0 CF
j
⎢
= ⎣
j 1

Calendar

Actual Day Basis

∆DYS = f(DT
) – f(DT
2
where
f(DT) = 365 (yyyy) + 31 (mm – 1) + dd + INTG (z/4) – x
and
for mm ≤ 2
x = 0
z = (yyyy) – 1
for mm > 2
x = INTG (0.4mm + 2.3)
z = (yyyy)
INTG = Integer portion.
Note: Additional tests are performed in order to ensure that the century (but
not millennium) years are not considered leap years.

30/360 Day Basis

DAYS = f(DT ) – f(DT
2
f(DT) = 360 (yyyy) + 30mm + z
for f(DT )
1
if dd = 31 then z = 30
1
≠ 31 then z = dd
if dd
1
for f(DT )
2
if dd = 31 and dd
2
if dd = 31 and dd
2
if dd < 31 then z = dd
2
File name: hp 12c pt_user's guide_English_HDPMF123E27
Printed Date: 2005/8/1
CF CF
CF
1 + 2 + +
...
1 2
+ +
1 ( ) 1 (
i 1 ( i )
− ⎤
n
⎡ −
− +
1 ( IRR ) j
⋅ +
⎥
1 ( IRR ) q
⎢
IRR
⎥
⎣
⎦
)
1
)
1
1
= 30 or 31 then z = 30
1
< 30 then z = dd
1 2
2
Page: 252 of 275
Dimension: 14.8 cm x 21 cm
n
+ n
i )
⎤
∑
nq
+
<
j CF
⎥
0
⎦