NeoCal User Guide
Cash Flow Analysis
This application uses the
and
registers. In addition, the user registers are used to store the
cash flow entries. The net present value (
)
function uses the
register to calculate the present
value of a series of cash flows and stores the result in the
register. The internal rate of return (
) function calculates the annual nominal interest rate
that is required to give a net present value of zero and stores the
result in the
register.
All cash flows must occur at regular intervals, but can be of
differing amounts. A cash flow entry consists of an amount and the
number of times it occurs consecutively. Up to 99 cash flow entries
can be stored after the initial cash flow. The amount of the initial
cash flow is stored in register 0, the amount of the first cash flow
is stored in register 1, the amount of the second cash flow is
stored in register 2, and so on. When you enter a series of cash
flows, you must account for every period, even those with a zero amount.
To enter the cash flows,
- Press
to clear any cash flow entries.
This clears all registers except
.
- Enter the number of periods per year in the
register.
- Enter the initial cash flow amount and press
.
- Enter the next cash flow amount and press
.
- If this cash flow entry occurs more than once consecutively,
enter the number of times it occurs and press
.
- Repeat steps 4 and 5 until all the cash flow entries are entered.
To review all of the cash flow entries,
- Press
to display the
initial cash flow amount.
- Press
to display the
amount of the next cash flow entry.
- Press
to view the
number of times that cash flow amount occurs.
- Repeat steps 2 and 3 until all the cash flow entries have been reviewed.
To review and edit the cash flow entries,
- Press
followed by the number of the cash
flow entry to display that amount.
- Press
followed by the number of the cash
flow entry to store the that amount.
- Pressing
displays the
next cash flow amount.
- Pressing
stores the
next cash flow amount, but does not change the number of times the
cash flow occurs.
- Pressing
displays the
number of times the current cash flow occurs. The current cash flow
entry is the entry whose amount was last stored or recalled.
- Pressing
stores the
number of times the current cash flow occurs.
- The cash flow amount can be changed by storing a new amount into
the corresponding register, provided that the amount was initially
stored using the
button.
- To add a new cash flow entry, first recall the last cash flow
amount, then store the new cash flow amount using the
button.
Let's suppose that you purchase $1000 worth of stock at the
beginning of each of the next 12 months and then sell the stock two
years from now for $16,000. What is the annual internal rate of return?
- Press
to clear the registers.
- Press
to store the number of periods per year.
- Press
to store the initial cash flow.
- Press
to store the first cash flow entry.
- Press
to store the number of occurrences for this cash flow.
- Press
to store the
second cash flow entry.
- Press
to store the number of occurrences for this cash flow.
- Press
to store the last cash flow amount.
- Press
to calculate the annual internal rate
of return (18.71 percent) and store it in the
register.
As another example, let's calculate the present value of twelve
monthly payments of $1000 assuming 8 percent nominal annual interest
rate and the first payment starting in one month from now?
- Press
to clear the registers.
- Press
to store the number of periods per year.
- Press
to store the
interest rate.
- Press
to store the
initial cash flow.
- Press
to store
the amount of the initial cash flow entry.
- Press
to store the number of occurrences.
- Press
to calculate the net present value
(11,495.78) and store the result in the
register.