HP 12c Owners Manual

  Section 4: Additional Financial Functions  61 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 61 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Calculating NPV for Grouped Cash Flows.
 A maximum of 20 cash flow 
amounts (in addition to the initial investment CF
0) can be stored in the hp 12c.* 
However, problems involving more than 20 cash flows can be handled if among 
the cash flows there are equal consecutive cash flows. For such problems, you 
merely enter along...

62  Section 4: Additional Financial Functions 
 
File name: hp 12c_users 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 131/2% 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...

  Section 4: Additional Financial Functions  63 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 63 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Calculating Internal Rate of Return (IRR) 
1.  Enter the cash flows using either of the methods described above under 
Calculating Net Present Value. 
2. Press fL. 
The calculated value of IRR appears in the display and also is automatically stored 
in the i register. 
Note: Remember that the L function may take a significant...

64  Section 4: Additional Financial Functions 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 64 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
The complex mathematical characteristics of the IRR computation have an 
additional ramification: Depending on the magnitudes and signs of the cash flows, 
the computation of IRR may have a single answer, multiple answers, a negative 
answer or no answer.
* 
For additional information regarding L
, refer to Appendix B. For an...

  Section 4: Additional Financial Functions  65 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 65 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Keystrokes Display  
:ga 
2.00 N5 
7n 
7.00 Resets the number in the n
 register to 
its original value. 
To display all the cash flow amounts and the number of times they occur 
consecutively: 
Keystrokes Display  
:ga 
1.00 N7 
:gK 
100,000.00 CF7 
:ga 
1.00 N6 
:gK 
4,500.00 CF6 
:ga 
2.00 N5 
:gK 
9,000.00 CF5 
. 
. 
. . 
....

66  Section 4: Additional Financial Functions 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 66 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Note: If you change the number in the n register in order to change an Nj, 
be sure to reset the number in the n register to the total number of cash flow 
amounts originally entered (not including the amount of the initial investment 
CF
0). If this is not done, NPV and IRR calculations will give incorrect results. 
Example 1:...

  Section 4: Additional Financial Functions  67 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 67 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
To calculate bond price and yield for a 30/360 bond (that is, using the basis of a 
30day month and a 360-day year — such as for municipal bonds, corporate 
bonds, and state and local government bonds), and to calculate bond price for 
bonds with an annual coupon payment, refer to Section 16: Bonds. 
Bond Price 
1.  Enter the...

68  Section 4: Additional Financial Functions 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 68 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Example:
 The market is quoting 883/8% for the bond described in the preceding 
example. What yield will that provide?
 
Keystrokes Display  
3\8z 
0.38 Calculates 3/8. 
88+$ 
88.38 Enters quoted price. 
6.75P 
6.75 Enters coupon rate. 
4.282004\ 
4.28 Enters settlement (purchase) date. 
6.042018 
6.042018 Enters maturity...

  Section 4: Additional Financial Functions  69 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 69 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Example:
 A metalworking machine, purchased for $10,000, is depreciated over 
5 years. Its salvage value is estimated at $500. Find the depreciation and 
remaining depreciable value for the first 3 years of the machine’s life using the 
declining-balance method at double the straight-line rate (200 percent 
declining-balance)....

 
70 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 70 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm
  Section 5 
Additional Operating 
Features 
Continuous Memory 
The calculator’s Continuous Memory contains the data storage registers, the 
financial registers, the stack and LAST X registers, program memory, and status 
information such as display format, date format, and payment mode. All 
information in Continuous Memory is preserved even while the calculator is turned...