HP 113394 User Guide - Page 74

74 Section 4: Additional Financial Functions In summary, to enter the cash flow amounts: 1. Press fCLEARH to clear the financial and storage registers. 2. Key in the amount of the initial investment, press Þ if that cash flow is negative, then press gJ. 3. Key in the amount of the next cash flow, press Þ if the cash flow is negative, then press gK. If the cash flow amount is zero in the next period, press 0 gK. 4. Repeat step 3 for each cash flow until all have been entered. With the amounts of the cash flows stored in the calculator's registers, you can calculate NPV as follows: 1. Enter the interest rate, using ¼ or gC. 2. Press fl. The calculated value of NPV appears in the display and also is automatically stored in the PV register. Example: An investor has an opportunity to buy a duplex for $80,000 and would like a return of at least 13%. He expects to keep the duplex 5 years and then sell it for $130,000; and he anticipates the cash flows shown in the diagram below. Calculate NPV to determine whether the investment would result in a return or a loss. Note that although a cash flow amount ($4,500) occurs twice, these cash flows are not consecutive. Therefore, these cash flows must be entered using the method described above. Keystrokes Display fCLEARH 80000ÞgJ 0.00 Clears financial and storage registers. -80,000.00 Stores CF0 (with minus sign for a negative cash flow). File name: hp 12c pt_user's guide_English_HDPMF123E27 Page: 74 of 275 Printed Date: 2005/8/1 Dimension: 14.8 cm x 21 cm