Discounted Cash Flow Analysis; Net Present Value; Internal Rate Of Return; Calendar - HP 12C Platinum User Manual

Discounted Cash Flow Analysis

Net Present Value

NPV = net present value of a discounted cash flow.
= cash flow at period j.
CF
j
CF
NPV = CF +
0
1 (

Internal Rate of Return

n = number of cash flows
CF = cash flow at period j.
j
IRR = Internal Rate of Return
⎡
1
k −
∑
0 CF
= ⋅
⎢
j
⎢
j 1
= ⎣

Calendar

Actual Day Basis

ΔDYS = f(DT ) – f(DT
2
where
f(DT) = 365 (yyyy) + 31 (mm – 1) + dd + INTG (z/4) – x
and
for mm ≤ 2
x = 0
z = (yyyy) – 1
for mm > 2
x = INTG (0.4mm + 2.3)
z = (yyyy)
INTG = Integer portion.
Note:
Additional tests are performed in order to ensure that the century (but
not millennium) years are not considered leap years.

30/360 Day Basis

DAYS = f(DT ) – f(DT
2
f(DT) = 360 (yyyy) + 30mm + z
for f(DT )
1
if dd = 31 then z = 30
1
if dd ≠ 31 then z = dd
1
for f(DT )
2
if dd = 31 and dd
2
if dd = 31 and dd
2
if dd < 31 then z = dd
2
CF
1 2
+ + ...
1
2
i )
+ 1 ( i )
+
n
− ⎤
1 ( IRR ) ⎡
+
j
1 ( IRR
⋅ +
⎥
⎢
IRR
⎥
⎣
⎦
)
1
)
1
1
= 30 or 31 then z = 30
1
< 30 then z = dd
1
2
Appendix E: Formulas Used
CF
n
+
n
1 ( i )
+
nq
− ⎤
∑
) CF
+
q < j
⎥
0
⎦
2
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