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62 Section 4: Additional Financial Functions
File name: hp 12c_user's guide_English_HDPMBF12E44 Page: 62 of 209
Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm
Example:
An investor has an opportunity to purchase a piece of property for
$79,000; and he would like a 13
1
/
2
% return. He expects to be able to sell it after
10 years for $100,000 and anticipates the yearly cash flows shown in the table
below:
Year Cash Flow Year Cash Flow
1
2
3
4
5
$14,000
$11,000
$10,000
$10,000
$10,000
6
7
8
9
10
$9,100
$9,000
$9,000
$4,500
$100,000
Since two cash flow amounts ($10,000 and $9,000) are repeated consecutively,
we can minimize the number of storage registers required by using the method just
described.
Keystrokes Display
fCLEARH
0.00
Clears financial and storage
registers.
79000ÞgJ
–79,000.00
Initial investment (with minus si
g
n for
a negative cash flow).
14000gK
14,000.00
First cash flow amount.
11000gK
11,000.00
Next cash flow amount.
10000gK
10,000.00
Next cash flow amount.
3ga
3.00
Number of times this cash flow
amount occurs consecutively.
9100gK
9,100.00
Next cash flow amount.
9000gK
9,000.00
Next cash flow amount.
2ga
2.00
Number of times this cash flow
amount occurs consecutively.
4500gK
4,500.00
Next cash flow amount.
100000gK
100,000.00
Final cash flow amount.
:n
7.00
Seven different cash flow amounts
have been entered.
13.5¼
13.50
Stores i.
fl
907.77
NPV.
Since NPV is positive, the investment would increase the financial value of the
investor’s assets by $907.77.