{"id":592,"date":"2020-05-01T15:07:42","date_gmt":"2020-05-01T19:07:42","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/businessmathematics\/?post_type=chapter&p=592"},"modified":"2025-06-04T13:04:05","modified_gmt":"2025-06-04T17:04:05","slug":"cash-flow-on-the-baii-plus","status":"publish","type":"chapter","link":"https:\/\/pressbooks.bccampus.ca\/businessmathematics\/chapter\/cash-flow-on-the-baii-plus\/","title":{"raw":"6.4 Cash Flow on the BAII Plus","rendered":"6.4 Cash Flow on the BAII Plus"},"content":{"raw":"

Example 6.4.1<\/h2>\r\n
You invested $1,000 and received $300 for the first 2 years at the end of each year. At the end of the 3rd year, you sold your investment for $800. The minimum Annual Rate of Return (MARR) is 14%.<\/div>\r\n
<\/div>\r\n
\"Cash<\/div>\r\n
<\/div>\r\nThe NPV is:\r\n

[latex]NPV =-$1,000 +\\frac{$300}{(1.14)^1}+\\frac{$300}{(1.14)^2}+\\frac{$800}{(1.14)^3}[\/latex]<\/p>\r\nBut we will solve using the BAII Plus Calculator:\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Step<\/strong><\/td>\r\nTo<\/strong><\/td>\r\nPress<\/strong><\/td>\r\nDisplay<\/strong><\/td>\r\n<\/tr>\r\n<\/thead>\r\n
1<\/td>\r\nSelect Cash Flow worksheet<\/td>\r\n[CF]<\/td>\r\n \r\n\r\nCFo=\u00a0\u00a0 (previous entered value)<\/td>\r\n<\/tr>\r\n
2<\/td>\r\nClear previous work<\/td>\r\n[2ND] [CE|C]<\/td>\r\n \r\n\r\nCFo=\u00a0\u00a0 0<\/td>\r\n<\/tr>\r\n
3<\/td>\r\nEnter initial investment, negative for outflows.<\/td>\r\n[1][0][0][0][+\\-][ENTER]<\/td>\r\nCFo =\u00a0 - 1,000<\/td>\r\n<\/tr>\r\n
4<\/td>\r\nEnter 1st cash flow<\/td>\r\n[\u2193][3][0][0][ENTER]<\/td>\r\nC01= \u00a0\u00a0\u00a0\u00a0300<\/td>\r\n<\/tr>\r\n
5<\/td>\r\nEnter frequency of 1st cash flow\r\n\r\n(frequency =2)<\/td>\r\n[\u2193][2][ENTER]<\/td>\r\nF01=\u00a0\u00a0 2<\/td>\r\n<\/tr>\r\n
6<\/td>\r\nEnter 2nd cash flow<\/td>\r\n[\u2193][8][0][0][ENTER]<\/td>\r\nC02=\u00a0\u00a0\u00a0\u00a0 800<\/td>\r\n<\/tr>\r\n
7<\/td>\r\nEnter frequency of 2nd\u00a0 cash flow<\/td>\r\n[\u2193][1][ENTER]<\/td>\r\nF02=\u00a0\u00a0\u00a0 1<\/td>\r\n<\/tr>\r\n
8<\/td>\r\nTo find NPV<\/td>\r\n[NPV]<\/td>\r\nI =\u00a0\u00a0\u00a0\u00a0 0<\/td>\r\n<\/tr>\r\n
9<\/td>\r\nEnter the discount rate<\/td>\r\n[1][4][ENTER]<\/td>\r\nI =\u00a0\u00a0\u00a0\u00a0 14<\/td>\r\n<\/tr>\r\n
10<\/td>\r\nCompute NPV<\/td>\r\n[\u2193][CPT]<\/td>\r\nNPV =\u00a0\u00a0 33.97536624<\/td>\r\n<\/tr>\r\n
11<\/td>\r\nTo find IRR<\/td>\r\n[IRR]<\/td>\r\nIRR =\u00a0\u00a0 0<\/td>\r\n<\/tr>\r\n
12<\/td>\r\nCompute IRR<\/td>\r\n[CPT]<\/td>\r\nIRR =\u00a0\u00a0\u00a0 15.69595604<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nWe will write this as:\r\n\r\n \r\n\r\n\r\n\r\n\r\n\r\n
CF0 = -1000<\/td>\r\n<\/td>\r\n<\/tr>\r\n
C01 = 300<\/td>\r\nF01 = 2<\/td>\r\n<\/tr>\r\n
C02 = 800<\/td>\r\nF02 = 1<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n \r\n

Using The BAII Plus for Cash Flows<\/h2>\r\n[embed]https:\/\/youtu.be\/RIe4LpSGja8[\/embed]\r\n

Your Own Notes<\/h2>\r\n
    \r\n \t
  • Are there any notes you want to take from this section? Is there anything you'd like to copy and paste below?<\/li>\r\n \t
  • These notes are for you only (they will not be stored anywhere)<\/li>\r\n \t
  • Make sure to download them at the end to use as a reference<\/li>\r\n<\/ul>\r\n[h5p id=\"1\"]","rendered":"

    Example 6.4.1<\/h2>\n
    You invested $1,000 and received $300 for the first 2 years at the end of each year. At the end of the 3rd year, you sold your investment for $800. The minimum Annual Rate of Return (MARR) is 14%.<\/div>\n
    <\/div>\n
    \"Cash<\/div>\n
    <\/div>\n

    The NPV is:<\/p>\n

    [latex]NPV =-$1,000 +\\frac{$300}{(1.14)^1}+\\frac{$300}{(1.14)^2}+\\frac{$800}{(1.14)^3}[\/latex]<\/p>\n

    But we will solve using the BAII Plus Calculator:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
    Step<\/strong><\/td>\nTo<\/strong><\/td>\nPress<\/strong><\/td>\nDisplay<\/strong><\/td>\n<\/tr>\n<\/thead>\n
    1<\/td>\nSelect Cash Flow worksheet<\/td>\n[CF]<\/td>\n <\/p>\n

    CFo=\u00a0\u00a0 (previous entered value)<\/td>\n<\/tr>\n

    2<\/td>\nClear previous work<\/td>\n[2ND] [CE|C]<\/td>\n <\/p>\n

    CFo=\u00a0\u00a0 0<\/td>\n<\/tr>\n

    3<\/td>\nEnter initial investment, negative for outflows.<\/td>\n[1][0][0][0][+\\-][ENTER]<\/td>\nCFo =\u00a0 – 1,000<\/td>\n<\/tr>\n
    4<\/td>\nEnter 1st cash flow<\/td>\n[\u2193][3][0][0][ENTER]<\/td>\nC01= \u00a0\u00a0\u00a0\u00a0300<\/td>\n<\/tr>\n
    5<\/td>\nEnter frequency of 1st cash flow<\/p>\n

    (frequency =2)<\/td>\n

    		[\u2193][2][ENTER]<\/td>\nF01=\u00a0\u00a0 2<\/td>\n<\/tr>\n
    6<\/td>\nEnter 2nd cash flow<\/td>\n[\u2193][8][0][0][ENTER]<\/td>\nC02=\u00a0\u00a0\u00a0\u00a0 800<\/td>\n<\/tr>\n
    7<\/td>\nEnter frequency of 2nd\u00a0 cash flow<\/td>\n[\u2193][1][ENTER]<\/td>\nF02=\u00a0\u00a0\u00a0 1<\/td>\n<\/tr>\n
    8<\/td>\nTo find NPV<\/td>\n[NPV]<\/td>\nI =\u00a0\u00a0\u00a0\u00a0 0<\/td>\n<\/tr>\n
    9<\/td>\nEnter the discount rate<\/td>\n[1][4][ENTER]<\/td>\nI =\u00a0\u00a0\u00a0\u00a0 14<\/td>\n<\/tr>\n
    10<\/td>\nCompute NPV<\/td>\n[\u2193][CPT]<\/td>\nNPV =\u00a0\u00a0 33.97536624<\/td>\n<\/tr>\n
    11<\/td>\nTo find IRR<\/td>\n[IRR]<\/td>\nIRR =\u00a0\u00a0 0<\/td>\n<\/tr>\n
    12<\/td>\nCompute IRR<\/td>\n[CPT]<\/td>\nIRR =\u00a0\u00a0\u00a0 15.69595604<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    We will write this as:<\/p>\n

     <\/p>\n\n\n\n\n\n
    CF0 = -1000<\/td>\n<\/td>\n<\/tr>\n
    C01 = 300<\/td>\nF01 = 2<\/td>\n<\/tr>\n
    C02 = 800<\/td>\nF02 = 1<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

     <\/p>\n

    Using The BAII Plus for Cash Flows<\/h2>\n