Keystrokes display – HP 15c User Manual
Page 35
Section 1: Using
_ Effectively
35
flows must occur at equal intervals; if no cash flow occurs for several time periods, enter 0
for the cash flow amount and the number of zero cash flows in that group.
After all the cash flows have been stored in matrix C, you can enter an assumed interest rate
and calculate the net present value (NPV) of the investment. Alternatively, you can calculate
the internal rate of return (IRR). The IRR is the interest rate that makes the present value of a
series of cash flows equal to the initial investment. It's the interest rate that makes the NPV
equal zero. IRR is also called the yield or discounted rate of return.
The fundamental equation for NPV is
1
1
1
.
1
as
defined
is
where
0
for
0
100
for
)
100
/
1
(
100
/
)
100
/
1
(
1
l
l
k
j
j
j
k
j
j
n
i
n
CF
i
i
i
i
i
CF
NPV
j
l
l
n
j
n
The program uses the convention that money received is entered and displayed as a positive
number, and that money paid out is entered and displayed as a negative number.
The program has the following characteristics:
The cash flow sequence (including the initial investment) must contain both a positive
flow and a negative flow. That is, there must be at least one sign change.
Cash flows with multiple sign changes may have more than one solution. This
program may find one solution, but it has no way of indicating other possibilities.
The IRR calculation may take several seconds (5 or more) depending of the number
of cash flow entries.
The program displays Error 4 if it is unable to find a solution for IRR or if the yield i
−100% in the NPV calculation.
Keystrokes
Display
|¥
Program mode.
´CLEARM
000-
´bA
001-42,21,11
NPV routine.
“
002- 26
2
003- 2
÷
004- 10
Calculates IIR / 100.
G2
005- 32 2
¦
006- 31
´bB
007-42,21,12
IIR routine.
1
008- 1
v
009- 36