# *Precision *Financial Calculator

#### Example 1-1 __Calculate NPV, IRR,
FV from Cash Flows__

Mr. Thompson was offered a join venture opportunity. The project will last
for five years. In the first year, Mr. Thompson put $50,000 into the joint venture
fund for business operations. From the second year, the project is expected
to start receiving revenues from production. Mr. Thompson’s share of revenues
will be $10,000, $15,000, $20,000, and $20,000 each respective year. Assuming
the current inflation rate is 3.82% each year, what is Mr. Thompson’s Return
of Investment and Net Present Value for this project?
What is the net value at the end of the project?

**[Answer: IRR=10.14%; NPV=$8,636;
FV=$10,033]**

**[Procedures]**

In the Cash Flows worksheet, type in -50000, 10000, 15000, 20000, 20000 from
row 1 to row 5 respectively. Click row 1, keep on pressing left mouse button,
drag down until row 5. You will see the IRR=10.14%. Next, enter 3.82 in the
Discount Rate box. You get new NPV and FV instantly.

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