CFj:used to enter even or uneven cashflows. (The location on calculator is: third row third column)
Orange key, Nj: This is were the frequency of the cashflows will be entered, for example if a cashflow occurs twice in a row, you would enter 2, orange key, Nj. (The location on calculator is: third row third column below CFj)
Orange key, NPV:The NPV key is used to compute the net present value of a stream of cashflows. After the stream has been inputed, an interest rate must be entered into the I/YR key first to discount the cashflow. Once all the factors are present, the NPV can be computed. (The location on calculator is: second row fourth column below the PRC key)
Orange key, IRR/YR:This button is used to compute the internal rate of return. This being the rate at which the NPV equals zero. (The location on calculator is: second row third column below the CST key)
Finding the NPV and the IRR of a stream of uneven cashflows.
Beginning with a cash outflow (investment) of $400, a project will result in 4 inflows
of unequal amounts, spaced evenly, of 100, 200, 200, and 300 dollars. These cashflows will
occur on a yearly basis.
Last Updated on 1 May 2002, e-mail any comments to: email@example.com