• To
calculate
net
present
value
(
111&
),
net
uniform
series (
lIB
),
and/or
net
future
value
(
..
):
1.
Key
in
the
periodic
interest
rate,
expressed
as a
percentage,
and
press
..
.
2.
Press
the
menu
key(s)
for
the
calculation(s)
you
want
to
do
.
Table 5-2. The CALC Menu for CFLO Lists
Menu
Key
Description
IDi1I
Calculates the sum
of
the cash flows .
...
Calculates the internal rate
of
return~the
interest (discount)
rate at which the net present value
of
the cash flows equals
O.
For conventional investments', the investment is attractive
if IRR% is greater than the cost
of
capital.
..
Stores the
periodic
interest rate, expressed as a percentage
(sometimes called
cost
of
capital, discount rate,
or
required
rate
of
return).
111&
Calculates the net present
value-the
present value
of
a se-
ries
of
cash flows plus the initial cost
of
the investment,
computed for a specified periodic interest rate.
lIB
Calculates the net uniform
series-the
dollar amount
of
regu-
lar, equal cash flows having a present value equivalent
to
the
net present value .
..
Calculates the net future value
of
a series
of
cash flows, cal-
culated by finding the future value
of
the net present value .
• Conventional investments meet four
criteria-(1)
the initial cash flow
is
negative, (2) some
flows following the initial flow are positive, (3) the sequence
of
cash flows changes sign only
once, and (4) the sum (TOTAL)
of
the cash flows
is
positive.
5:
Cash
Flow
Calculations
87
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