Texas Instruments BA-20 Profit Manager User Manual - Page 49
Computing NPV, solutions depends on the number of sign
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• Internal rate of return (IRR) is the interest rate at which the net present value of the cash flows is equal to 0. Computing NPV 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 %. Computing IRR 1. Press ). The IRR variable and current value are displayed (based on the current cash-flow values). 2. To compute the internal rate of return, press %. The calculator displays the IRR value. When solving for IRR, the calculator performs a series of complex, iterative calculations that can take seconds or even minutes to complete. The number of possible IRR solutions depends on the number of sign changes in your cash-flow sequence. • When a sequence of cash flows has no sign changes, no IRR solution exists. The calculator displays Error 5. • When a sequence of cash flows has only one sign change, only one IRR solution exists, which the calculator displays. • When a sequence of cash flows has two or more sign changes: - At least one solution exists. - As many solutions can exist as there are sign changes. Cash Flow Worksheet 45