Net Present Value Calculation | CFA Level 1 Exam Preparation

Calculate Net Present Value using 15% Interest Rate | CFA Level 1 Exam

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Question

What is the Net Present Value of this series of annual cash flows using an interest rate of 15% per year: Year 0: <$15,000>, Year 1: $5,000, Year 2: $8,000, Year

3: $11,000? (Note that the <> are used to indicate a negative number).

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On the BAII Plus, press CF 2nd CLRWork 15000 +/- ENTER DownArrow 5000 ENTER DownArrow DownArrow 8000 ENTER DownArrow DownArrow 11000

ENTER DownArrow DownArrow 2nd Quit. Then press NPV 15 ENTER DownArrow CPT. On the HP12C, press these keys: 15000 CHS BlueShift CFo 5000

BlueShift CFj 8000 BlueShift CFj 11000 BlueShift CFj Then press 15 i, YellowShift NPV. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard. Make sure the BAII Plus has the P/Y value set to 1.