Accounting Business Reporting for Decision Making

CHAPTER 12 Capital investment 529

APPENDIX 12B

Calculating net present value

To solve the problem in illustrative example 12.4, clear your calculator and enter the information shown

below.

1.1 1/x × 30 = M+ C [Result is 27.2727]

1.1 x^2 1/x × 60 = M+ C [Result is 49.5868]

1.1 yx 3 = 1/x × 50 = M+ C [Result is 37.5657]

1.1 yx 4 = 1/x ×

−

100 = M+ C [Result is 68.3013]

RCL [Result is 182.72366] 120 = [Result is 62.7266]

Note that on some calculators, the yx button is shown as ^ and the 1/x button is shown as x–1. M+ is the

memory-in button, C is the clear button and RCL is the memory recall button.