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BA II Plus: NPV Calculation Step by Step
Exact BA II Plus keystrokes for net present value with a worked capital budgeting example.
TL;DR
Use the CF worksheet for uneven cash flows, enter the discount rate in the NPV worksheet, and compute. Keep CF0 negative for the initial investment.
Formula Reference
NPV
NPV = sum[CF_t / (1 + r)^t] + CF0CF0 usually already carries the negative investment sign.
BA II Plus Keystrokes
- CF 2nd CLR WORK
- 100000 +/- ENTER down-arrow
- 30000 ENTER down-arrow down-arrow
- 40000 ENTER down-arrow down-arrow
- 50000 ENTER down-arrow down-arrow
- NPV 10 ENTER down-arrow CPT
Worked Example
- Inputs: CF0 = -100,000; C01 = 30,000; C02 = 40,000; C03 = 50,000; I = 10 percent.
- Result: NPV is about $2,407.81.
- Decision: accept an independent project if NPV is positive.
Common Mistakes
- Typing 0.10 for the discount rate instead of 10.
- Leaving old cash flows in the worksheet.
- Forgetting to move past each frequency field.
Related Guides
- NPV and IRR Calculations for CFA Level I - Capital budgeting guide for net present value, internal rate of return, and BA II Plus cash flow worksheet inputs.
- BA II Plus: IRR Calculation Step by Step - Exact BA II Plus workflow for calculating IRR from uneven project cash flows.
- BA II Plus Calculator Shortcuts for CFA Level I - Fast BA II Plus workflows for clearing registers, storing values, changing signs, and avoiding exam-day calculator errors.