Solver Calculations; Direct Solutions - HP 17bII Owner's Manual

may be additional positive or negative answers, or no true solution at all.
You can continue searching for other solutions by halting the calculation
and entering a different guess.
One way to obtain a good guess for IRR% is to calculate NPV for
various interest rates ( I% ). Since IRR% is the interest rate at which NPV
equals zero, the best estimate of IRR% is the interest rate that yields the
value for NPV closest to zero.
To find a good estimate for IRR% , key in a guess for IRR% and press
 Then, press  to calculate NPV for that value. Repeat the
calculation of NPV for several values of I% , and look for trends in the
results. Choose as your guess for IRR% a value of I% that produces an
NPV close to zero.

Solver Calculations

As noted in chapter12, the Solver uses two methods to find solutions,
depending on the complexity of the equation: direct and iterative (an
indirect). To use all the calculating power included in the Solver, it
would help to understand, in a general way, how it works.

Direct Solutions

When you start a calculation (by pressing a menu key), the Solver first
tries to find a direct solution by "isolating" the variable you are solving
for (the unknown ). Isolating a variable involves rearranging the equation
so that the unknown variable is by itself on the left-hand side of the
equation. For example, suppose you enter the equation:
－
P R O F I T = P R I C E C O S T
If you've stored values for PROFIT and PRICE , pressing  causes
the Solver to internally rearrange the equation algebraically to solve for
COST ( COST is the unknown):
－
C O S T = P R I C E P R O F I T
Answers calculated this way are called direct solutions.
240 B: More About Calculations
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