Using HP 10bII for Net Present Value (Cash Flow Problem)
To solve Cash Flow problem, remember to setup calculator to 1 Payment / Year mode:
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1 [Shift][P / YR]
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Display 1.000
Entering data in HP 10bII:
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[Shift] [C ALL]
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Display 1 P_Yr
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130,000 [+ / -] [CFj]
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7,000 [CFj]
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10,000 [+ / -] [CFj]
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20,000 [CFj]
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3 [Shift] [Nj]
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12,000 [CFj]
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-8,000 [CFj]
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178,500 [CFj]
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10 [I / YR]
Should the machine be replaced? If negative value in the Net Present Value indicates that it equipment would cost less.
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Press [Shift][NPV]
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Display -4,855.85 (You should not replace machine).