User manual COMPAQ 30B BUSINESS PROFESSIONAL

[. . . ] HP 20b Business Consultant HP 30b Business Professional Financial Calculator User's Guide HP Part Number: NW238-90001 Edition 1, December 2009 i Legal Notice This manual and any examples contained herein are provided "as is" and are subject to change without notice. Hewlett-Packard Company makes no warranty of any kind with regard to this manual, including, but not limited to, the implied warranties of merchantability, noninfringement and fitness for a particular purpose. In this regard, HP shall not be liable for technical or editorial errors or omissions contained in the manual. Hewlett-Packard Company shall not be liable for any errors or for incidental or consequential damages in connection with the furnishing, performance, or use of this manual or the examples contained herein. [. . . ] Opens the Internal Rate of Return (IRR) and Net Present Value (NPV) menus. C I >< o j RP Cash Flow Example After an initial investment of 80, 000. 00, CF (0), you expect returns over the next five years as follows: Cash Flow Number 1 2 3 4 5 6 Cash Flow Amount 5, 000. 00 4, 500. 00 0. 00 4, 000. 00 5, 000. 00 1 15, 000. 00 Occurrences 1 1 1 1 5 1 Given this information, calculate the total of the cash flows and the internal rate of return (IRR) of the investment. Calculate net present value (NPV) and net future value (NFV), assuming an annual investment interest rate of 10. 5%. See Figure 1 for the cash flow diagram and Table 5-2 for how to enter the cash flows. The example is calculated with RPN as the active operating mode. 38 Cash Flows Table 5-2 Cash Flow Example Keys Display Description Opens the cash flow list. C 8000 0}I I 5000 I I 4500 I I I I 4000 I I Inputs -80000 as the monetary value of the initial cash flow. Displays the current monetary value of CF(5). Cash Flows 39 Table 5-2 Cash Flow Example Keys Display Description Inputs 5000 as the monetary value of CF(5). Accepts 1 as the number of occurrences for CF(6). 5000 I 5I 1150 00I I 40 Cash Flows Analyzing Cash Flows The various functions used to analyze cash flows are located in the NPV P and IRR R or before entering cash flows, you will be redirected to the menus. The results shown in Table 5-4 are based on the values entered in the cash flows as shown in Table 5-2. Table 5-3 Analyzing Cash Flows Item Inv. Enter the investment rate or discount rate for the cash flow followed by menus. * NetPV NetFV NetUS Payback Discounted Payback Total #CF/Yr IRR% Safe I%* MIRR* Net Present Value. Shows the value of the cash flows at the time of the initial cash flow, discounting the future cash flows by the value set for Inv. Shows the value of the cash flows at the time of the last cash flow, discounting the earlier cash flows by the value set for Inv. Shows the per-period payment of a regular, periodic cash flow of equivalent present value to the cash flow list. Shows the number of periods required for the investment to return value if the cash flows are discounted using the value set in Inv. This is the discount rate that returns a Net Present Value for the entered cash flows. This rate must be entered in both the NPV and IRR I. Modified Internal Rate of Return. Used primarily when there is more than one sign change in a series of cash flows to evaluate the overall profitability of an investment. Used primarily when there is more than one sign change in a series of cash flows to evaluate the overall profitability of an investment. FMRR* *Does not apply to the HP 20b. Cash Flows 41 P Inv. I%* Net FV Net US DWN Payback Discounted Payback Total #CF/Yr Safe I%* DWN MIRR* FMRR* #CF/Yr Figure 2 The Menu Maps for the NPV and IRR Menus *Does not apply to the HP 20b. 42 Cash Flows Table 5-4 Keys Display Description Opens the NPV menu. P 10. 5I >1 I << < < < << R Inputs 10. 5 for investment rate. (Optional) Verifies one cash flow list per year, as per the example. Displays the NPV of the cash flow with the given Inv. I%. Displays the Net US of the cash flow with the given interest rate. Displays the number of periods required for the cash flow to repay the investment Scrolls to the total value of the cash flow. Displays the IRR for the cash flow. Cash Flows 43 Editing Cash Flows In the cash flow list, you can view and modify the current monetary value of a specific cash < or > repeatedly to scroll through the list. Press monetary value of the cash flow three, CF(3), in the example in Table 5-2 from 0 to 200, with CF(3)= displayed, press 200 followed by I. You can also modify the number of occurrences of a cash flow in the same manner with #CF(n) displayed. Pressing :j with a cash flow displayed erases the displayed cash flow. Pressing :o inserts a cash flow into the list before the displayed cash flow. NPV and IRR menus*. [. . . ] The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. HP shall not be liable for technical or editorial errors or omissions contained herein. FOR CONSUMER TRANSACTIONS IN AUSTRALIA AND NEW ZEALAND: THE WARRANTY TERMS CONTAINED IN THIS STATEMENT, EXCEPT TO THE EXTENT LAWFULLY PERMITTED, DO NOT EXCLUDE, RESTRICT OR MODIFY AND ARE IN ADDITION TO THE MANDATORY STATUTORY RIGHTS APPLICABLE TO THE SALE OF THIS PRODUCT TO YOU. Regulatory Information Federal Communications Commission Notice This equipment has been tested and found to comply with the limits for a Class B digital device, pursuant to Part 15 of the FCC Rules. These limits are designed to provide reasonable protection against harmful interference in a residential installation. [. . . ]