User manual TEXAS INSTRUMENTS BA II PLUS PROFESSIONAL

[. . . ] BA II PLUSTM PROFESSIONAL Calculator Important Information Texas Instruments makes no warranty, either express or implied, including but not limited to any implied warranties of merchantability and fitness for a particular purpose, regarding any programs or book materials and makes such materials available solely on an "as-is" basis. In no event shall Texas Instruments be liable to anyone for special, collateral, incidental, or consequential damages in connection with or arising out of the purchase or use of these materials, and the sole and exclusive liability of Texas Instruments, regardless of the form of action, shall not exceed the purchase price of this product. Moreover, Texas Instruments shall not be liable for any claim of any kind whatsoever against the use of these materials by any other party. USA FCC Information Concerning Radio Frequency Interference This equipment has been tested and found to comply with the limits for a Class B digital device, pursuant to Part 15 of the FCC rules. These limits are designed to provide reasonable protection against harmful interference in a residential installation. [. . . ] The calculator displays positive values for inflows (cash received) and negative values for outflows (cash paid out). To change C01, key in a value and press !. 43 To enter cash flows: Cash Flow Worksheet 5. Repeat steps 4 through 7 for all remaining cash flows and frequencies. To review entries, press # or ". Deleting Cash Flows When you delete a cash flow, the calculator decreases the number of subsequent cash flows automatically. The DEL indicator confirms that you can delete a cash flow. The cash flow you specified and its frequency is deleted. Inserting Cash Flows When you insert a cash flow, the calculator increases the number of the following cash flows, up to the maximum of 32. Note: The INS indicator confirms that you can insert a cash flow. 44 Cash Flow Worksheet 1. 3. Press # or " to select the cash flow where you want to insert the new one. The new cash flow is entered at C02. Computing Cash Flows The calculator solves for these cash-flow values: · Net present value (NPV) is the total present value of all cash flows, including inflows (cash received) and outflows (cash paid out). Payback (PB) is the time required to recover the initial cost of an investment, disregarding the present value of the cash inflows (time value of money). Discounted payback (DPB) is the time required to recover the initial cost of an investment using the present value of the cash inflows (time value of money). Internal rate of return (IRR) is the interest rate at which the net present value of the cash flows is equal to 0. Modified internal rate of return (MOD) considers the reinvestment of cash when solving for IRR. · · · · · Computing NPV, NFV, PB, and DPB 1. To compute the net present value for the series of cash flows entered, press %. The DBP value appears. Cash Flow Worksheet 45 Computing IRR and MOD 1. The IRR variable and current value are displayed (based on the current cash-flow values). The calculator displays the MOD value. When solving for IRR, the calculator performs a series of complex, iterative calculations that can take seconds or even minutes to complete. The number of possible IRR solutions depends on the number of sign changes in your cash-flow sequence. · When a sequence of cash flows has no sign changes, no IRR solution exists. The calculator displays Error 5. · When a sequence of cash flows has only one sign change, only one IRR solution exists, which the calculator displays. · When a sequence of cash flows has two or more sign changes: ­ ­ At least one solution exists. As many solutions can exist as there are sign changes. When more than one solution exists, the calculator displays the one closest to zero. Because the displayed solution has no financial meaning, you should use caution in making investment decisions based on an IRR computed for a cash-flow stream with more than one sign change. 46 Cash Flow Worksheet The time line reflects a sequence of cash flows with three sign changes, indicating that one, two, or three IRR solutions can exist. · When solving complex cash-flow problems, the calculator might not find PB, DPB, IRR, and MOD, even if a solution exists. In this case, the calculator displays Error 7 (iteration limit exceeded). Example: Solving for Unequal Cash Flows These examples show you how to enter and edit unequal cash-flow data to calculate: · · · · · · Net present value (NPV) Net future value (NFV) Payback (PB) Discounted payback (DPB) Internal rate of return (IRR) Modified internal rate of return (MOD) A company pays $7, 000 for a new machine, plans a 20% annual return on the investment, and expects these annual cash flows over the next six years: Year Purchase 1 2­5 6 Cash Flow Number CFo C01 C02 C03 Cash Flow Estimate -$7, 000 3, 000 5, 000 each year 4, 000 As the time line shows, the cash flows are a combination of equal and unequal values. As an outflow, the initial cash flow (CFo) appears as a negative value. Cash Flow Worksheet 47 Entering Cash-Flow Data To Select Cash Flow worksheet. [. . . ] THIS WARRANTY IS VOID IF THE PRODUCT HAS BEEN DAMAGED BY ACCIDENT OR UNREASONABLE USE, NEGLECT, IMPROPER SERVICE, OR OTHER CAUSES NOT ARISING OUT OF DEFECTS IN MATERIALS OR CONSTRUCTION. Warranty Disclaimers. ANY IMPLIED WARRANTIES ARISING OUT OF THIS SALE, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE LIMITED IN DURATION TO THE ABOVE ONE-YEAR PERIOD. TEXAS INSTRUMENTS SHALL NOT BE LIABLE FOR LOSS OF USE OF THE PRODUCT OR OTHER INCIDENTAL OR CONSEQUENTIAL COSTS, EXPENSES, OR DAMAGES INCURRED BY THE CONSUMER OR ANY OTHER USER. Some states/provinces do not allow the exclusion or limitation of implied warranties or consequential damages, so the above limitations or exclusions may not apply to you. This warranty gives you specific legal rights, and you may also have other rights that vary from state to state or province to province. [. . . ]