MBA
646 Work I.xlsx

646 Work I.xlsx - PROBLEM 2-1 Given 10 Discount rate Cash...

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PROBLEM 2-1 Given Discount rate 10% Cash Flow Year (s) Factors (cash flow * discount factor a. \$500 5 0.6209 b. \$500 5 3.7908 c. \$500 50 9.9148 d. \$500 100 9.9993 tutorials on excel financial functions: FV, PV, PMT, RATE, NPER a = - PV(rate = 10%, nper = 5, pmt = 0, fv = 500,type = 0) Solution Legend = Value given in problem = Formula/Calculation/Analysis required = Qualitative analysis or Short answer required = Goal Seek or Solver cell = Crystal Ball Input = Crystal Ball Output

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Solution: Present Value \$ 310.46 <-- check excel PV function \$ 1,895.39 \$ 4,957.41 \$ 4,999.64
PROBLEM 2-2 Solution = Value given in prob Given = Formula/Calculatio = Qualitative analysi Initial investment \$ 4,000,000.00 = Goal Seek or Solve Annual Cash Flows 500,000.00 = Crystal Ball Input Project Life 10 = Crystal Ball Outpu a. Year Cash Flow 0 \$ (4,000,000.00) 1 \$ 500,000.00 2 \$ 500,000.00 3 \$ 500,000.00 4 \$ 500,000.00 5 \$ 500,000.00 6 \$ 500,000.00 7 \$ 500,000.00 8 \$ 500,000.00 9 \$ 500,000.00 10 \$ 500,000.00 Solution: IRR = 4.28% <-- use IRR function to re Given b. Year Cash Flow 0 \$ (4,000,000.00) <-- work out cash flows 1 \$ 500,000.00 2 \$ 500,000.00 3 \$ 500,000.00 4 \$ 500,000.00 5 \$ 300,000.00 -200,000.00 <-- Additional investment 6 \$ 500,000.00 7 \$ 500,000.00 8 \$ 500,000.00 9 \$ 500,000.00 10 \$ 500,000.00 11 \$ 500,000.00 12 \$ 500,000.00 13 \$ 500,000.00 14 \$ 500,000.00 Solution: IRR = 7.94% <-- use IRR function

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tutorials on excel financial functions, IRR and NPV
n Legend blem on/Analysis required is or Short answer required er cell ut eplicate

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