HP 12c Platinum Reference Manual page 52

52 Investment Analysis
salvage value. An accountant informs management to take the 10% capital investment tax
credit at the end of the second year and to figure the cash flows at a 48% tax rate. The
after tax cost of capital (discounting rate) is 5 percent.
Because lease payments are made in advance and standard loan payments are made in
arrears the following cash flow schedule is appropriate for a lease with the last payment in
advance.
Year Maintenance
0
1
2
3
4
5
6
7
8
9
10
12c platinum / 12C
RPN Keystrokes
gÂ
fCLEARH
10n12¼
10000Þ$
P
.48?3
.05\1+?4
10000\
1500-?5
10?6
1700\+
1:3-§?2
200\
1700t
200\
1700t
1000g(043
t
200\
1700t
200\
1700t
Lease Payment
1700+1700
200
200
200
200
1500
300
300
300
300
300
12c platinum
ALG Keystrokes
gÂ
fCLEARH
10n12¼
10000Þ$
P
.48?3
.05+1³?4
10000-
1500³?5
10?6
1700+³
1-:3§~
³?2
200³
1700t
200³
1700t
1000g(036
t
200³
1700t
200³
1700t
Tax Credit
1700
1700 1000
1700
1700
1700
1700
1700
1700
0
0
Display
0.00
-10,000.00
1,769.84
0.48
1.05
8,500.00
10.00
3,400.00
1,768.00
312.36
200.43
1,000.00
907.03
95.05
-4.38
Buy Back
750
Comments
Always use negative loan
amount.
Purchase payment.
Marginal tax rate.
Discounting factor.
Depreciable value.
Depreciable life.
1st lease payment.
After-tax expense.
Present value of 1st year's
net purchase.
2nd year's advantage.
Tax credit.
Present value of tax credit.
3rd year.
4th year.