Excel Ch. 6, 9

Excel Ch. 6, 9 - o Growing perpetuity PMT(Int RATE –...

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Ch. 6: Excel PV of an annuity: o How much should you be willing to pay for the annuity at the beginning? o =-PV (rate, nper, pmt) FV of an annuity: o How much would the annuity be worth after you had received all of the cash flows? I.e. at the end o =-FV (rate, nper, pmt) Solving for PMT amount: o =PMT (rate, nper, -pv, fv) o PV: Treat as initial lump sum to be invested Make negative Solving for NPER, RATE: o =NPER (same as before) o =RATE (same as before) o FV: “I want to have \$x left over from my PV” Perpetuities: o Annuity that goes on forever o No such thing as FV of a perpetuity o =PMT/ RATE (both per period)

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Unformatted text preview: o Growing perpetuity: PMT/ (Int. RATE – Growth Rate) o Declining perpetuity: Same as above, but make growth rate negative • PV of uneven cash flows: o =NPV (rate, range of flows) o Leave out period 0 • FV of uneven cash flows: o =FV (rate, \$(per)5 – (per)1, 0, -cash flow for per. 1) for period one o Do this for all 5 periods o Sum the FVs together o *OR, =FV (rate, 5, 0, -NPV (rate, range of cash flows)) • NPV: o =NPV (rate, range of cash flows at per. 1) – cash flow at per. 0 • IRR: o =IRR (range of cash flows at per. 0, guess)...
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This note was uploaded on 06/11/2011 for the course BUSI 408 taught by Professor Croce during the Spring '08 term at UNC.

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Excel Ch. 6, 9 - o Growing perpetuity PMT(Int RATE –...

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