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  • 1.  NPV - BAII Plus Professional help

    Posted 09-04-2020 08:23 AM
    Hello,

    I am trying tp figure out if I am doing something wrong with calculating NPV on my BA II Plus professional calculator.  The question goes "Vendor A requires an initial investment of $4,000,000, life of 6 years, net cash outflow of $500,000/year and 14% cost of capital". The answer says the net present value is $5,944,500.

    In my BAII Plus Calculator, i go:
       CFo= -4,000,000
       C01= -500,000
       F01= 6
       I= 14
       NPV= 5,944,333.76 

    Difference of ~$166

    Can someone please let me know if I typing it wrong?

    Thanks!



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    REGINALD-CHRIS
    Accountant
    Philadelphia PA
    United States
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  • 2.  RE: NPV - BAII Plus Professional help

    Posted 09-05-2020 03:52 PM
    Hi Reginald. You are using your calculator correctly. There is a small variance due to rounding between using the calculator and using the tables. If you are looking at large numbers you can usually find the answer that is close. Smaller numbers are going to be more susceptible to the variance. It of course also depends on the answer choices. I found I just use the table. It doesn't take that much longer especially when using a BAII. I just took Part 2 and I made it through the whole test with just a basic calculator.

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    Destiny Metz
    Director/Manager
    Colstrip MT
    United States
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