Net Present Value (NPV) Calculation

Exercise ID: tvm-real-009

Mode SwitchingUneven Cash Flows

Description

An investment requires $100,000 today. It generates $30,000 in Year 1, $40,000 in Year 2, and $50,000 in Year 3. Required return is 10%. Calculate NPV.

Given Values

CF0

-100000

C01

30000

F01

C02

40000

F02

C03

50000

F03

10%

Objective

Calculate NPV

Steps

Total 22 steps

Step 1:Open Cash Flow Worksheet

Key Sequence:

Before Key Press:

0.00

After Key Press:

CF0 0.00

⏱ 1000ms

Step 2:Clear Work (CF Data)

Key Sequence:

2ndCE_C

Before Key Press:

CF0 0.00

After Key Press:

CF0=0.00

⏱ 1500ms

Step 3:Input -100000

Key Sequence:

PLUS_MINUS100000

Before Key Press:

CF0=0.00

After Key Press:

-100000

⏱ 2400ms

Step 4:Enter CF0

Key Sequence:

ENTER

Before Key Press:

-100000

After Key Press:

CF0=-100000.00

⏱ 1000ms

Step 5:Next Cash Flow

Key Sequence:

DOWN

Before Key Press:

CF0=-100000.00

After Key Press:

C01 0.00

⏱ 800ms

Step 6:Input 30000

Key Sequence:

30000

Before Key Press:

C01 0.00

After Key Press:

30000

⏱ 2000ms

Step 7:Enter C01

Key Sequence:

ENTER

Before Key Press:

30000

After Key Press:

C01=30000.00

⏱ 1000ms

Step 8:Move to Frequency

Key Sequence:

DOWN

Before Key Press:

C01=30000.00

After Key Press:

F01 1.00

⏱ 800ms

Step 9:Next Cash Flow

Key Sequence:

DOWN

Before Key Press:

F01 1.00

After Key Press:

C02 0.00

⏱ 800ms

Step 10:Input 40000

Key Sequence:

40000

Before Key Press:

C02 0.00

After Key Press:

40000

⏱ 2000ms

Step 11:Enter C02

Key Sequence:

ENTER

Before Key Press:

40000

After Key Press:

C02=40000.00

⏱ 1000ms

Step 12:Move to Frequency

Key Sequence:

DOWN

Before Key Press:

C02=40000.00

After Key Press:

F02 1.00

⏱ 800ms

Step 13:Next Cash Flow

Key Sequence:

DOWN

Before Key Press:

F02 1.00

After Key Press:

C03 0.00

⏱ 800ms

Step 14:Input 50000

Key Sequence:

50000

Before Key Press:

C03 0.00

After Key Press:

50000

⏱ 2000ms

Step 15:Enter C03

Key Sequence:

ENTER

Before Key Press:

50000

After Key Press:

C03=50000.00

⏱ 1000ms

Step 16:Move to Frequency

Key Sequence:

DOWN

Before Key Press:

C03=50000.00

After Key Press:

F03 1.00

⏱ 800ms

Step 17:Next Cash Flow

Key Sequence:

DOWN

Before Key Press:

F03 1.00

After Key Press:

C04 0.00

⏱ 800ms

Step 18:Open NPV Worksheet

Key Sequence:

NPV

Before Key Press:

C04 0.00

After Key Press:

I 0.00

⏱ 1000ms

Step 19:Input 10

Key Sequence:

Before Key Press:

I 0.00

After Key Press:

⏱ 1400ms

Step 20:Enter Interest Rate

Key Sequence:

ENTER

Before Key Press:

After Key Press:

I=10.00

⏱ 1000ms

Step 21:Scroll to NPV

Key Sequence:

DOWN

Before Key Press:

I=10.00

After Key Press:

NPV 0.00

⏱ 800ms

Step 22:Compute NPV

Key Sequence:

CPT

Before Key Press:

NPV 0.00

After Key Press:

NPV=-2,103.68

⏱ 1500ms

Calculator Display

      0.00

Speed:← →

💡 Press Space to quickly pause/play

⚠️ Common Mistakes and Traps

1.Forgetting to clear CF worksheet (2nd + CE/C)
2.Entering initial outlay as positive
3.Forgetting to enter the interest rate (I)

(Expand the sections to view answers and common mistakes before printing.)

💡 Tip: Use your browser's print function (Ctrl+P or Cmd+P) to export this exercise as a PDF or print it on paper.

9 / 15