calculator and NPV/IRR/BA 2 Plus

[smgardy]

Hello. I am having difficulty trying to figure out my calculator. I am using the Texas Instruments BA 2 Plus Buisness Analyst edition. Could someone please tell me the exact buttions, and the sequence to press them in, to compute both the NPV and the IRR. I will use an example taken from page 239 of CFA level one, book one. CF0=-2 million
CF1=0.5 million, CF2=0.75million and CF3=1.35 million. The discount rate is = 10% and the answer for NPV=0.088655 million. So, again, how did you get this NPV and How would you get the IRR,, obviously i am not a computer engineer. Thanks in advance.

 

[jamespucyk]

LOL, I would suggest reading the mannual, at least for the cashflow, major mathematical and TVM sections, oh and the stats functions are and WILL be useful. You should learn your calculator inside and out cus if you don't know how to use it you will lose time.

Here is the sequence
1) Enter Cash Flows
|CF| Then input : CF0=-2 million |Enter| |Down Arrow| x2
CF1=0.5 million |Enter| |Down Arrow|x2, CF2=0.75million |Enter| |Down Arrow|x2 and CF3=1.35 million |Enter|

2) Calculate NPV
NPV I= 10 |Enter| |Down Arrow| |CPT|

 

[c_hayhurst]

1) [CF] Enter initial investment as a *negative* number
2) [down button]
3) dollar value of first cash flow
4) [down button]
5) number of times that cash flow appears in the listed cash flows.
6) [down button]


repeat 3-6 until all cash flows are entered

To then find NPV:
[NPV]
enter value of I, which is the cost of capital
[down button]
[CPT]

That gives you the NPV of the cash flows.

If you are looking for the IRR, do steps 1-6 and don't do the NPV part. Then:
[IRR]
[CPT]

Ta-da!

There you go. Hope that helps.