HP 12C Financial calculator - Manual (Page 187)

Appendix D: Formulas Used 187
File name: hp 12c_user's guide_English_HDPMBF12E44 Page: 187 of 209
Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm
Discounted Cash Flow Analysis
Net Present Value
NPV = net present value of a discounted cash flow.
CF
j
= cash flow at period j.
n
n
i
CF
i
CF
i
CF
CF NPV
) 1 (
...
) 1 ( ) 1 ( 2
2
1
1
0 +
+ +
+
+
+
+ =
Internal Rate of Return
n = number of cash flows
CF
j
= cash flow at period j.
IRR = Internal Rate of Return
0
1
) 1 (
) 1 ( 1
0 CF IRR
IRR
IRR
CF j q
j nq k
j
n
j
+
⎥
⎦
⎤
⎢
⎣
⎡
+ ⋅
⎥
⎥
⎦
⎤
⎢
⎢
⎣
⎡
+ −
⋅ =
∑ −
=
−
< ∑
Calendar
Actual Day Basis
∆DYS = f(DT
2
) – f(DT
1
)
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
2
) – f(DT
1
)
f(DT) = 360 (yyyy) + 30mm + z
for f(DT
1
)
if dd
1
= 31 then z = 30
if dd
1
≠ 31 then z = dd
1
for f(DT
2
)
if dd
2
= 31 and dd
1
= 30 or 31 then z = 30
if dd
2
= 31 and dd
1
< 30 then z = dd
2
if dd
2
< 31 then z = dd
2