Appendix B: More About Calculations
I
Appendix B: More About Calculations
IRR/YR Calculations
The calculator determines
IRR/YR
for a set of cash flows using mathematical formulas that
search for the answer. The process finds a solution by estimating an answer and then using
that estimate to do another calculation. This is called an
iterative
process.
In most cases, the calculator finds the desired answer, since there is usually only one solution
to the calculation. However, calculating
IRR/YR
for certain sets of cash flows is more complex.
There may be more than one (or no) mathematical solution to the problem.
Possible Outcomes of Calculating IRR/YR
These are the possible outcomes of an
IRR/YR
calculation:
•
Case 1.
The calculator displays a positive answer. This is the only positive answer. However, one or
more negative answers may exist.
•
Case 2.
The calculator displays a negative answer and no message.This is the only answer.
•
Case 3.
The calculator displays:
No Solution.
There is no answer. This situation might be the result of
an error, such as a mistake in keying in the cash flows. A common mistake that results in this message
is putting the wrong sign on a cash flow. A valid cash-flow series for an
IRR/YR
calculation must have
at least one positive and one negative cash flow.
Range of Numbers
The largest positive and negative numbers available on the calculator are ± 9.99999999999
× 10
499
; the smallest positive and negative numbers available are ±1 × 10
–499
. Underflow
briefly displays
UFLO
and then displays zero. Refer to the messages
OFLO
and
UFLO
in
Appendix C.
Equations
Business Percentages and Break-even Calculations
%CHG
=
PROFIT
=
(SP-VC) x UNITS - FC
Probability
MAR
PRC COST
–
PRC
----------------------------------
⎝
⎠
⎛
⎞
100
×
=
MU
PRC COST
–
COST
----------------------------------
⎝
⎠
⎛
⎞
100
×
=
NEW
OLD
–
OLD
--------------------------------
⎝
⎠
⎛
⎞
100
×
P
n
!
n
r
–
(
)
!
------------------
=
C
n
!
n
r
–
(
)
!
r
!
----------------------
=
Summary of Contents for 10bII+
Page 1: ...i HP 10bII Financial Calculator User s Guide HP Part Number NW239 90001 Edition 1 May 2010 ...
Page 3: ...iii HP 10bII Financial Calculator ...
Page 30: ...At a Glance 22 ...
Page 144: ...Statistical Calculations 136 ...
Page 183: ...Warranty Regulatory and Contact Information 9 ...
Page 184: ...Warranty Regulatory and Contact Information 10 ...