The video shows you how to calculate capital budgeting with a Texas Instruments BA2+ financial calculator. Capital budgeting will help you determine cash flows for given investments for a certain number of years in the future, thus helping you determine if the investment is worthwhile. The buttons you will use are the CF (cashflows) button, the NPV (net present value) button, and the IRR (internal rate of return) button. The video uses the example of a $10,000 investment that will return $5,000 in cash flows the first year, $4,000 the second year, and $2,000 each of the next two years. First push the CF button and type in the initial investment (10,000). Make the 10,000 negative since it is what you will be paying out. Hit enter, and then the down arrow. You are now ready to begin entering your future cash flows from this potential project. The calculator will prompt you with the notation "CO1" for the first cash flow. Type 5,000, press enter and then the down arrow. The calculator will then give you the prompt "FO1" for frequency, giving you the opportunity to enter how many times in a row the cash flow occurs. In this example it occurs once so you will simply hit the down arrow again to enter the next cash flow. Do this for all the years, remembering to change the frequency to 2 for the last 2,000. Once all cash flows are entered, you can calculate the net present value (NPV) of the project or the internal rate of return (IRR). To calculate the NPV, hit the NPV key and enter the interest rate  that is, the rate of return on the cash flows. Interest rates are entered as whole numbers. Hit compute, and it will tell you the NPV. If the NPV is positive, you should accept the project. To calculate the IRR, hit the IRR button after calculating the NPV and hit compute. This should help in doing capital budgeting problems with your calculator.
 Hot
 Latest

How To: Get rent assistance if you are lowincome, elderly, or disabled

How To: Get an American Express Black or Centurion credit card

How To: Use the stock market as your own atm machine

How To: Improve any credit score with 3 steps

How To: Understand Forex trading strategies

How To: Prevent someone from stealing your identity

How To: Calculate the net present value for your business or investment

How To: Invest in foreign currencies

How To: Try the stock market without investing money

How To: Keep your identity safe from thieves

How To: Prevent identity theft and know how thieves work

How To: Invest in a bear market

How To: Green your business

How To: Know standard deviation in your financial portfoli

How To: Use forex trading spreads to make better currency investments

How To: Increase government website traffic & boost your ROI

How To: Have Proper Risk Managment When Trading

How To: Understand money and get rich

News: Warren Buffett Gives Props to JayZ

How To: Get rent assistance if you are lowincome, elderly, or disabled

How To: Get an American Express Black or Centurion credit card

How To: Use the stock market as your own atm machine

How To: Improve any credit score with 3 steps

How To: Understand Forex trading strategies

How To: Calculate the net present value for your business or investment

How To: Prevent someone from stealing your identity

How To: Invest in foreign currencies

How To: Try the stock market without investing money

How To: Have Proper Risk Managment When Trading

How To: Benefit from Effective Internet Marketing Strategies

How To: Find out if you are owed unclaimed funds in New York State

How To: Write a legal business case study

How To: Sign up to become a mystery shopper and earn money for shopping

How To: Use forex trading spreads to make better currency investments

News: Warren Buffett Gives Props to JayZ

How To: Value an interest rate swap

How To: Know standard deviation in your financial portfoli

How To: Keep your identity safe from thieves
1 Comment
perfect and awesome. answered all my questions for my final
Share Your Thoughts