Exam 3am #36 -- Calculator work! understand, map, calculator, question, example

optiix

I understand the concept but can’t get my calculator ot work!
It’s the simplest thing too…but the book gives example for the TA not the HP.
Can someone map out the key strokes for me for this question to get IRR for the HP 12C?

thecfawannabe

CFo = Initial Equity Investment (8000000) = .20 x 40,000,000
CF1 = 1,676,000 (given)
CF2 = 1,802,000 (given)
CF3 = CFAT3 + ERAT4 = 1,934,300 + 4,934,000 = 6,868,300
Plug this into the HP12C and you’ll get IRR = 10.96 or 11%

ShooterMcCFA

I read the back of the book. I plugged into my calculator and it keeps giving me error.
You set PV =0 right? and hit f IRR after you input all your cash flows right?

cityboy

make sure you do a CHS - change sign before you input your CF0. It has to be opposite in sign.
otherwise you will see the dreaded error.
you do not need to do anything with PV at all.

ap0258

The 8,000,000 is a negative outflow. So, the first input should be -8,000,000 = CFo, the rest are just the additional positive cash flows…
I would avoid using the PV, PMT, FV, N, i, keys on the HP 12C for this one….use the cash flow keys instead…hope this makes sense

slackeranalyst

No it does, slipped my mind to invert the signs.