Computing cash flows, Computing npv, nfv, pb, and dpb – Texas Instruments Calculator User Manual
Page 49
Cash Flow Worksheet
45
1.
Press
# or " to select the cash flow where you want to insert the
new one. For example, to insert a new second cash flow, select
C02
.
2.
Press
& X.
3.
Key in the new cash flow and press
!. The new cash flow is
entered at
C02
.
Computing Cash Flows
The calculator solves for these cash-flow values:
•
Net present value (
NPV
)
is the total present value of all cash flows,
including inflows (cash received) and outflows (cash paid out). A
positive
NPV
value indicates a profitable investment.
•
Net future value (
NFV
) is the total future value of all cash flows. A
positive
NFV
value also indicates a profitable investment.
•
Payback (
PB
) is the time required to recover the initial cost of an
investment, disregarding the present value of the cash inflows (time
value of money).
•
Discounted payback (
DPB
) is the time required to recover the initial
cost of an investment using the present value of the cash inflows
(time value of money).
•
Internal rate of return (
IRR
) is the interest rate at which the net
present value of the cash flows is equal to 0.
•
Modified internal rate of return (
MOD
) considers the reinvestment
of cash when solving for
IRR
.
Computing NPV, NFV, PB, and DPB
1.
Press
( to display the current discount rate (
I
).
2.
Key in a value and press
!.
3.
Press
# to display the current net present value (
NPV
).
4.
To compute the net present value for the series of cash flows
entered, press
%.
5.
To compute the net future value (
NFV
), press
#. The
NFV
value
appears.
6.
To compute payback (
PB
), press
#. The
PB
value appears.
7.
To compute the payback discounted over time (
DBP
), press
#. The
DBP
value appears.