BA II Plus: the cash flow, NPV and IRR worksheets
Uneven cash flows go in the CF register; NPV and IRR then read it. The frequency field is what most candidates miss.
5 min read
Entering the cash flows
CF opens the register. CF0 is the time-zero flow, then each Cnn is an amount and each Fnn is how many CONSECUTIVE periods that amount repeats. Using the frequency field turns a twenty-period level stretch into two keystrokes instead of twenty.
| Keys | Effect |
|---|---|
| CF · 2ND · CLR WORK | Open and empty the register — old flows survive otherwise. |
| 50000 · +/− · ENTER · ↓ | CF0 = −50,000, the initial outlay. |
| 18000 · ENTER · ↓ · 1 · ENTER · ↓ | C01 = 18,000 occurring once. |
| 22000 · ENTER · ↓ · 1 · ENTER · ↓ | C02 = 22,000 occurring once. |
| 25000 · ENTER · ↓ | C03 = 25,000. |
Reading NPV and IRR
NPV prompts for I (the required return, entered as a percentage) and then computes. IRR needs no input at all — it reads the same register and iterates.
| Keys | Effect |
|---|---|
| NPV · 9 · ENTER · ↓ · CPT | Net present value at 9%: 4,335.31. |
| IRR · CPT | Internal rate of return: 13.539%. |
Two habits worth building
First, always clear the register before entering a new problem; leftover flows from the previous question are invisible until the answer is wrong. Second, check the sign of CF0 — an outlay entered as positive gives an NPV that is wrong by twice the outlay and an IRR that does not exist.