Texas Instruments Calculator User Manual
Page 92
88
Appendix — Reference Information
Net present value depends on the values of the initial cash flow (
CF0
),
subsequent cash flows (
CFj
), frequency of each cash flow (
nj
), and the
specified interest rate (
i
).
where:
i
is the periodic interest rate used in the calculation of NPV.
where:
is the frequency of the
k
th
cash flow.
IRR
= 100
×
i
, where i satisfies
npv
() = 0
Internal rate of return depends on the values of the initial cash flow
(
CF0
) and the subsequent cash flows (
CFj
).
i
=
I/Y
÷ 100
The calculator uses this formula to compute the modified internal rate of
return:
where:
positive
= positive values in the cash flows
negative
= negative values in the cash flows
N
= number of cash flows
rrate
= reinvestment rate
frate
= finance rate
NPV
(values, rate) = Net present value of the values in the rate
described
NFV
1 i
+
(
)
p
NPV
×
=
p
n
k
k
1
=
N
∑
=
n
k
MOD
NPV (positive, rrate
–
NPV (negative, frate)
-----------------------------------------------------
1 N
⁄
1 rrate
+
(
) 1
–
Ч
=