NPV and IRR for Uneven Cashflows Using TI-BAII Plus

NPV and IRR for Uneven Cashflows Using TI-BAII Plus - F03...

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1 Example 1: A firm evaluates all of its projects by applying the IRR rule. If the required return is 14%, should the firm accept the following project? Year Cash Flow 0 -15,000 1 10,000 2 0 3 10,000 First, reset the variables to zero <CF> <2 nd > <CLR Work> <ENTER> <CF> 15000 <+/-> <ENTER> CF 0 = -15000 <Down> 10000 <ENTER> C01= 10000 <Down> F01 =1 <Down> <ENTER> C02 = 0 <Down> F02 =1 <Down> 10000 <ENTER> C03 = 10000 <Down>
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Unformatted text preview: F03 =1 <IRR> <CPT> Gives IRR = 16.11 2 Example 2: For the cash flows in the previous problem, suppose the firm uses the NPV decision rule. At a required rate of return of 14%, should the firm accept the project? What if the required return was 18%? Now, enter the required rate of return: <NPV> 14 <ENTER> I = 14 <Down> <CPT> NPV = 521.64 <Down> 18 <ENTER> I = 18 <Down> <CPT> NPV = -439.12...
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This note was uploaded on 04/11/2011 for the course FIN 322 taught by Professor Gillette during the Winter '07 term at Grand Valley State.

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NPV and IRR for Uneven Cashflows Using TI-BAII Plus - F03...

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