20070201
7-4 Cash Flow (Investment Appraisal)
This calculator uses the discounted cash fl ow (DCF) method to perform investment appraisal
by totalling cash fl ow for a fi xed period. This calculator can perform the following four types of
investment appraisal.
• Net present value (
NPV
)
• Net future value (
NFV
)
• Internal rate of return (
IRR
)
• Payback period* (
PBP
)
* The payback period (
PBP
) can also be called the “discounted payback period” (
DPP
).
When the annual interest rate (
I
%) is zero, the
PBP
is called the “simple payback period”
(
SPP
).
A cash fl ow diagram like the one shown below helps to visualize the movement of funds.
With this graph, the initial investment amount is represented by
CF
0
. The cash fl ow one year
later is shown by
CF
1
, two years later by
CF
2
, and so on.
Investment appraisal can be used to clearly determine whether an investment is realizing
profi ts that were originally targeted.
u
NPV
n
: natural number up to 254
u
NFV
u
IRR
In this formula,
NPV
= 0, and the value of
IRR
is equivalent to
i
× 100. It should be noted,
however, that minute fractional values tend to accumulate during the subsequent calculations
performed automatically by the calculator, so
NPV
never actually reaches exactly zero.
IRR
becomes more accurate the closer that
NPV
approaches to zero.
CF
0
CF
1
CF
2
CF
3
CF
4
CF
5
CF
6
CF
7
CF
0
CF
1
CF
2
CF
3
CF
4
CF
5
CF
6
CF
7
NPV
=
CF
0
+ + + + … +
(1+
i
)
CF
1
(1+
i
)
2
CF
2
(1+
i
)
3
CF
3
(1+
i
)
n
CF
n
i
=
100
I
%
NPV
=
CF
0
+ + + + … +
(1+
i
)
CF
1
(1+
i
)
2
CF
2
(1+
i
)
3
CF
3
(1+
i
)
n
CF
n
i
=
100
I
%
NFV
=
NPV
×
(1
+
i
)
n
NFV
=
NPV
×
(1
+
i
)
n
0 =
CF
0
+ + + + … +
(1 +
i
)
CF
1
(1 +
i
)
2
CF
2
(1 +
i
)
3
CF
3
(1 +
i
)
n
CF
n
0 =
CF
0
+ + + + … +
(1 +
i
)
CF
1
(1 +
i
)
2
CF
2
(1 +
i
)
3
CF
3
(1 +
i
)
n
CF
n
7-4-1
Cash Flow (Investment Appraisal)
Summary of Contents for CFX-9850GB PLUS
Page 19: ...20070201 4 Contents Appendix 1 Error Message Table α 1 1 2 Input Ranges α 2 1 ...
Page 335: ...20070201 u Input Example u Results 6 5 25 Tests ...
Page 361: ...20070201 Calculation Result Output Example p F distribution probability 6 7 15 Distribution ...
Page 435: ...20070201 8 8 2 Program Library egcw w ww w ...
Page 437: ...20070201 8 8 4 Program Library Example 1 Example 2 fw fw baw baw bf ca w w ...
Page 439: ...20070201 8 8 6 Program Library d wba wb w w ...
Page 441: ...20070201 8 8 8 Program Library dw fcde fcde w wfcde daw wfcde w ...
Page 443: ...20070201 8 8 10 Program Library b awaw bwaw aw x d w ...
Page 591: ...20070201 Appendix 1 Error Message Table 2 Input Ranges α ...
