HP·38E/38C - Slide Rule Museum

52 The Financial Functions
Example 2: An investor has an opportunity to purchase a piece of
property for $70,000. If the going rate of return on this type of investment
is 13.75%, and the after-tax cash flows are forecast as fo llows,
should the investor purchase the property?
Year Cash Flow ($)
1 $14,000
2 11 ,000
3 10,000
4 10,000
5 10,000
6 9,100
7 9,000
8 9,000
9 4,500
10 71 ,000 • (property sold in 1 a th year)
Keystrokes Display
[]] CLEAR I ALL I 0.00
13 .75 [IJ 13.75 Interest rate.
70000 I cHsl 1]] I CFo I -70,000.00 Initial investment.
14000 I]] @U 14,000.00 First cash flow amount.
11 000 I]] @U 11,000.00 Second cash flow amount.
10000 I]] @U 10,000.00 Third cash flow amount.
3 1]]@ 3.00 Number of times that cash
flow occurs.
9 100 I]]@U 9,100.00 Fourth cash flow amount.
9000 I]]@U 9,000.00 Fifth cash fl ow amount.
2 1]]@ 2.00 Number of times that cash
flow occurs .
4500 I]] @U 4,500.00 Sixth cash fl ow amount.
7 1000 I]]@U 71,000.00 Seventh cash flow amount.
IRCl l0 7.00 Verifies that you have
entered seven distinct cash
flows.
[]]I NPV I 879.93 Net present value.