(12C) Discounted Payback Period Program

[rprosperi]

(06-10-2019 09:32 PM)Joe_H Wrote:  For the CFA exams one of the reasons most commonly quoted for preferring the TI BA II is that the HP12C cannot do discounted payback calculations (or simple ones either). In another thread (https://www.hpmuseum.org/forum/thread-10385.html) Carson has written a program to do payback calculations and I had mistakenly thought at first they were discounted ones but they are simple payback periods only. I therefore set out to write such a program and it is now working successfully.

It is a challenging program to write as none of the TVM registers can be used (they are required for the NPV calculations the programs uses) or the R registers as these may be used for the cashflow sequence itself. Therefore, the only available registers are X, Y, Z and L (T isn't used).

The program uses n for the cashflow sequence (auto generated when cashflow is entered), i for the discount rate and the X register (display) has to have the total number of payments in the sequence (excl. CF0). The program takes into account the Nj values at each step in the cashflow sequence.

The program can do discounted or simple payback calculations. For simple payback period just set i to zero.

If redoing the calculation (say simple first and then discounted or different discount rates) Nj values greater than 1 may have to be reset to the correct value and n will have to be reset. It is quick and easy to reset these when you're familiar with entering and editing cashflow sequences on the HP12C (need to be for CFA exams).

I have a 3rd edition HP12C (Chinese one 2 cells model HSTNJ-KN05 same as 30th anniv edition but that text isn't on the face purchased around 2010/11) and it runs on lengthy cashflows in well less than a second.

The program and other details are in the attached pdf. Let me know how you get on with it.

It's unlikely I will ever need such a calculation, and I'm 100% certain I'll never take the CFA exam, but I WILL enter it in a 12C to dabble, just because of the beautiful documentation; it's a lot like using an old school HP manual. I look forward to the stackrobatics too, always fun to explore.

Thanks for sharing this Joe!