(11C) Purchase or Lease

[Albert Chan]

(09-25-2018 04:27 PM)Dieter Wrote:  Yes, the Horner method works nicely here, but why do you want to do it this complicated?

1,15 [1/x] [ENTER] [ENTER] [ENTER]
2270 [x]
1815 [+] [x]
1375 [+] [x]
948 [+] [x]
533 [+] [x]

=> 4250,71

Good old RPN practice. ;-)

With this, there is no need for a cash flow program

I use RCL 0 because of "/"
Multiply flipped rate (rounded) might accumulate too much errors.

There is no reason to inisist for NPV, it is more accurate to do FV.
For purchase / lease decisions, FV comparison is just as good.
With FV, reversed cash flow input is not needed.

1.15 [ENTER] [ENTER] [ENTER]
533 [x]
948 [+] [x]
1375 [+] [x]
1815 [+] [x]
2270 [+]

=> FV (year 5) = 8549.70

If NPV is needed, just "pull back" numbers to Year 0:

[X<>Y] 5 [Y^X] [/]

=> NPV (year 0) = 4250.71