Sharp EL-738 EL-738 Operation Manual - Page 41

Variables used in discounted cash flow analysis, NPV and IRR, Basic operations - calculate irr

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Procedure Key operation Display Change the first cash , 30000 J flow value from -25,000 to -30,000. CF D-= -3000000 Change the frequency i i i i CF N3= of 5000 from 2 to 1. i i i 1 J 100 Add a new data set (6000) immediately before 5000. . e 6000 J CF D3= 600000 To confirm the corrections, press . z to jump to the first data item and press i to browse through each data item. Variables used in discounted cash flow analysis Variable RATE (I/Y) NET_PV Description Internal rate of return (IRR) Net present value (NPV) Default value 0 - • The variable RATE (I/Y) is shared by the variable I/Y. NET_PV is for calculation only and has no default value. • The BGN/END setting is not available for discounted cash flow analysis. NPV and IRR The calculator solves the following cash flow values: Net present value (NPV): The total present value of all cash flows, including cash paid out (outflows) and cash received (inflows). A profitable investment is indicated by a positive NPV value. Internal rate of return (IRR): The interest rate that gives a net present value of zero. Basic operations Refer to page 19 for basic variable operations. 1. Press s to clear the display. • Make sure the calculator is in NORMAL mode. 40

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40
Procedure
Key operation
Display
Change the first cash
flow value from –25,000
to –30,000.
,
30000
J
CF
D—=
-3000000
Change the frequency
of 5000 from 2 to 1.
i
i
i
i
i
i
i
1
J
CF
N3=
100
Add a new data set
(6000) immediately
before 5000.
.
e
6000
J
CF
D3=
600000
To confirm the corrections, press
.
z
to jump to the first
data item and press
i
to browse through each data item.
Variables used in discounted cash flow analysis
Variable
Description
Default value
RATE (I/Y)
Internal rate of return (IRR)
0
NET_PV
Net present value (NPV)
—
• The variable RATE (I/Y) is shared by the variable I/Y. NET_PV
is for calculation only and has no default value.
• The BGN/END setting is not available for discounted cash flow
analysis.
NPV and IRR
The calculator solves the following cash flow values:
Net present value (NPV):
The total present value of all cash flows, including cash paid out
(outflows) and cash received (inflows). A profitable investment is
indicated by a positive NPV value.
Internal rate of return (IRR):
The interest rate that gives a net present value of zero.
Basic operations
Refer to page 19 for basic variable operations.
1.
Press
s
to clear the display.
• Make sure the calculator is in NORMAL mode.