How to Calculate Present Values with Multiple Future Cash Flows Using a Financial Calculator

To calculate the present value of multiple cash flows with a financial calculator, we will simply discount the individual cash flows one at a time using the same technique we used in our previous chapter, so this is not really new. There is a shortcut, however, that we can show you. We will use the numbers in Example 6.3 to illustrate.

To begin, of course we first remember to clear out the calculator! Next, from Example 6.3, the first cash flow is $200 to be received in one year and the discount rate is 12 percent, so we do the following:

Enter

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