Chapter_06 - Ross, Westerfield, and Jordan's Spreadsheet...

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by Brad Jordan and Joe Smolira Version 9.0 Chapter 6 (Beta In these spreadsheets, you will learn how to use The following conventions are used in these spr 1) Given data in blue 2) Calculations in red NOTE: Some functions used in these spreadsheets may Ross, Westerfield, and Jordan's Spreadsheet Master Fundamentals of Corporate Finance, 9th edition SUM NPV PV of an annuity PMT Annuity interest rate Annuity periods Annuity due EAR APR Exponential function Nested function FV of an annuity Loan amortization worksheet
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the "Analysis ToolPak" or "Solver Add-In" be installed in To install these, click on the Office button then "Excel Options," "Add-Ins" and select "Go." Check "Analysis ToolPak" and "Solver Add-In," then click "OK."
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ta) e the following Excel functions: readsheets: y require that
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in Excel.
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Chapter 6 - Section 1 Present Value and Future Value of Multiple Cash Flows Future Value of Multiple Unequal Cash Flows t Cash flow 1 $10,000 2 15,000 3 2,000 4 19,000 5 16,500 Interest rate: 10% t Cash flow 1 $14,641.00 2 19,965.00 3 2,420.00 4 20,900.00 5 16,500.00 Total: $74,426.00 RWJ Excel Tip To add the future values together, we used the SUM function. The SUM function is used so Present Value of Multiple Unequal Cash Flows t Cash flow 1 $8,250,000 2 7,750,000 Unfortunately, Excel does not have a function to calculate the future value of multiple cash future value of individual cash flows and sum them. Suppose we have the following set of What is the future value of these cash flows? We can set up a table to find the future value year 5, we will use a simple trick. The number of years each cash flow will be compounded number of periods and use the interest rate as an absolute reference. The future value of t To find the present value of multiple unequal cash flows, we will first discuss the same me Chad Johnson's contract which was discussed in the chapter opener. What is the present
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3 3,250,000 4 4,750,000 5 5,250,000 6 6,250,000 Interest rate: 12% t Cash flow 1 $7,366,071 2 $6,178,253 3 $2,313,286 4 $3,018,711 5 $2,978,991 6 $3,166,445 Total: $25,021,756 Present value: $25,021,756 RWJ Excel Tip The NPV function is located under the Financial functions. We used the following argument We can set up a table to find the present value of each cash flow similar to the table we us is: Excel does have a function that can be utilized to find the present value of unequal cash flo detail later, but for now, we will use it to find the present value of these cash flows. Using t
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While we could have entered each cash flow individually (Year 1 cash flow as Value 1, Ye Excel automatically places the cash flow one period apart when entered in this manner.
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o often that it has its own button on the Home menu. h flows when the cash flows are of different amounts. However, we can calculate the
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This note was uploaded on 06/16/2011 for the course FIN 521 taught by Professor Varney during the Spring '11 term at Andrew Jackson.

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Chapter_06 - Ross, Westerfield, and Jordan's Spreadsheet...

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