Cash Flow Calculations - HP 10BII Owner's Manual

Cash Flow Calculations
How to Use the Cash Flow Application
The cash flow application is used to solve problems where
cash flows occur over regular intervals but are of varying
amounts. You can also use cash flow calculations to solve
problems with regular, equal, periodic cash flows, but
these situations are handled more easily using ТУМ.
In general, these are the steps for cash flow calculations on
the HP 10BII.
1. Organize your cash flows on paper. A cash flow diagram is useful.
2. Clear the registers.
3. Enter the number of periods per year.
4. Enter the amount of the initial investment.
5. Enter the amount of the next cash flow.
6. If the amount entered in step 5 occurs more than once consecutively,
enter the number of times it occurs.
7. Repeat steps 5 and 6 for each cash flow and group.
8. To calculate net present value, enter the annual interest rate and
press @); then press COP). Or, to calculate annual internal rate of
return, press QE.
Example: A Short Term Investment. The following cash flow diagram
represents an investment in stock over three months. Purchases were
made at the beginning of each month, and the stock was sold at the end
of the third month. Calculate the annual internal rate of return and the
monthly rate of rcturn.
6: Cash Flow Calculations 75