


With this tutorial on Texas Instruments BA II Plus, you will learn how to find net present value of an annuity with constant and uneven cash flows
NPV Example with constant cash flows
We will illustrate how you can use TI BA II Plus to find net present value with an annuity that has constant payment. Let's assume Sears Corporation purchased a machinery for $7,000 it will save company $3,000 annually for next 5 years. The company's cost of capital is 12%. How do we find the net present value with TI BA II Plus
NPV Step by Step using TI BA II Plus
To  Press  Display  
Set all variables to default  2nd  reset  enter  RST  0.00 
Select Cash Flow worksheet.  CF  CF_{0}=  0.00  
Enter initial cash flow.  7000  +/  ENTER  CF_{0}=  7000.00 
Enter cash flow for years 1 to 5  ↓ ↓ 
3000 5 
ENTER ENTER 
C01= F01= 
3000.00 5 
Access interest rate variable  NPV  I=  0.00  
Enter interest rate per period.  12  ENTER  I=  12.00  
Compute net present value.  ↓  CPT  NPV=  3814.33  
NPV Example with uneven cash flows
A four year financial project has net cash flows of $20,000; $25,000; $30,000, and $50,000 in the next four years. It will cost $75,000 to implement the project. If the required rate of return is 20%, conduct a discounted cash flow calculation to determine the net present value (NPV).
NPV Step by Step using TI BA II Plus
To  Press  Display  
Set all variables to default  2nd  reset  enter  RST  0.00 
Select Cash Flow worksheet.  CF  CF_{0}=  0.00  
Enter initial cash flow.  75000  +/  ENTER  CF_{0}=  75000.00 
Enter cash flow for year 1  ↓ ↓ 
20000  ENTER  C01= F01= 
20000.00 1 
Enter cash flow for year 2  ↓ ↓ 
25000  ENTER  C02= F02= 
25000.00 1 
Enter cash flow for year 3  ↓ ↓ 
30000  ENTER  C03= F03= 
30000.00 1 
Enter cash flow for year 4  ↓ ↓ 
50000  ENTER  C04= F04= 
50000.00 1 
Access interest rate variable  NPV  I=  0.00  
Enter interest rate per period.  20  ENTER  I=  20.00  
Compute net present value.  ↓  CPT  NPV=  501.54  