Question

An investment is expected to produce specified variable cash flows each year over a 10 year holding period and is projected to sell for $ 45,000 at the end of year 10. Assuming the investor has a 9 percent yield requirement, at what price could the investor purchase this investment to achieve the desired yield?

How would I input this information into a financial calculator? I have the problem worked out, but want to verify that I worked it out correctly.

Answer 1

Here the cash flows are not provided

Assuming

C1=500

C2=300

C3=400

C4=100

C5=200

C6=300

C7=900

C8=1000

C9=500

C10=1500+45000

Using financial calculator
press CF 2nd CE/C
press CF
0
Enter
down arrow,
500
Enter
down arrow (twice),
300
Enter
down arrow (twice),
400
Enter
down arrow (twice),
100
Enter
down arrow (twice),
200
Enter
down arrow (twice).
300
Enter
down arrow (twice).

900
Enter
down arrow (twice),
1000
Enter
down arrow (twice).
500
Enter
down arrow (twice).
46500
Enter
down arrow (twice).

press NPV
Type 9
Enter
press down arrow
press CPT