HP 0012C-90001, User Manual

Page: 66 / 213

66 66 66 66 Section 4: Section 4: Section 4: Section 4: Additional Financial Functions Additional Financial Functions Additional Financial Functions Additional Financial Functions
File name: HP 12c+_user's guide_English_E_HDP0F12AE03_062608 - Modified.doc Page: 66 of 213
Printed Date: 2021/6/16 Dimension: 14.8 cm x 21 cm
Note:
Note: Note:
Note: If you change the number in the n register in order to change an N
j
,
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: Example 1: Example 1: Example 1: With the cash flows now stored in the calculator, change
CF
2
from
$11,000 to $9,000, then calculate the new NPV for a 13 1 /
2
% return.
Keystrokes
Keystrokes Keystrokes
Keystrokes Display
Display Display
Display
9000
?
2 9,000.00
Stores the new
CF
2
in R
2
.
13.5 ¼ 13.50
Stores
i
.
*
fl
–644.75
The new
NPV.
Since this NPV is negative, the investment would decrease the financial value of
the investor’s assets.
Example 2:
Example 2: Example 2:
Example 2: Change N
5
from 2 to 4, then calculate the new NPV .
Keystrokes
Keystrokes Keystrokes
Keystrokes Display
Display Display
Display
5
w
5.00 Stores j in the n nn n register.
4
ga 4.00
Stores the new
N
5
.
7
w
7.00 Resets the number in the n
nn
n register to
its original value.
fl
–1,857.21 The new
NPV.
Bond Calculations
Bond Calculations Bond Calculations
Bond Calculations
The hp 12c enables you to solve for bond price (and the interest accrued since the
last interest date) and the yield to maturity.
†
The
E
and
S
calculations are
done assuming a semiannual coupon payment and using an actual/actual basis
(such as for U.S. Treasury bonds and U.S. Treasury notes). In accordance with
market convention, prices are based on a redemption (par) value of 100.
*
This step is necessary in this example because we have calculated
IRR
since the first time we
calculated
NPV
. The
IRR
calculation replaced the 13.5 we keyed into
i
before calculating
NPV
with the result for
IRR
– 13.72.
†
All bond calculations are performed in accordance with. the Securities Industry Association’s
recommendations as contained in Spence, Graudenz, and Lynch, Standard Securities
Calculation Methods, Securities Industry Association, New York, 1973.