Question

How could I use TI-84 to get the answer? Enter the cash flows into the calculator and compute NPV and IRR. CF0 = -110,000; C01 = 51,780; F01 = 2; C02 = 71,780; F02 = 1 NPV; I = 20; CPT NPV = 10,648 CPT IRR = 25.8% The answer is included, but I am looking for the steps.

Answer 1

Detailed steps to compute NPV and IRR in TI 84:

Press STAT   Choose 1: Edit

Then the table with L1, L2 and L3 will display.

We will input year 1 to year 3 cash flows in L1 list.

Input 51780, 51780, 71780 for the display L1(1), L1(2), L1(3) which will store as cash flow year 1, 2 and 3 respectively.

L1(1) = 51780 ENTER

L1(2) = 51780 ENTER

L1(3) = 71780 ENTER

L1	L2	L3
51780
51780
71780

Press 2^nd QUIT to go back to original screen

To compute NPV press APPS then choose 1 and then 7

APPS → 1: Finance → 7: NPV npv(

For npv syntax input cost of capital, initial investment and data list

npv(20,-110000, 2^nd 1)

It will display as

npv(20,-110000, L1)

Press ENTER to display NPV

10647.69

To compute IRR again press APPS choose 1 and then 8

APPS → 1: Finance → 8: irr

For irr syntax input cost of capital and data list

irr(-110000, 2^nd 1)

It will display as

irr(-110000, L1)

Press ENTER to display IRR

      25.76153412