QC 9.3 - 5 Enter the formula =NPV(6 −350 75 75 75 75 75...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Marques Chandler 5/22/2014 Excel QC 9.3 1. Payback periods do not take into account the time value of money. 2. Use the formula =PV(5%,1,0,100) to calculate the present value of $100 a year from now. Excel returns the negative cash flow value ($95.24), indicating that $100 a year from now is a fair exchange for $95.24 today. In other words, $100 a year from now is worth more than $95 today by 24 cents. 3. Enter the Excel formula =NPV(6%,50,75,100), which returns the value $197.88. 4. Enter the formula =NPV(6%, 75, 75, 75, 75, 75, 75)–350, which returns the value $18.80.
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 5. Enter the formula =NPV(6%, −350, 75, 75, 75, 75, 75, 75). Excel returns the value $17.74. 6. Enter the formula =IRR(range), where range is a cell range containing the values: –350, 75, 75, 75, 75, 75, 75. Excel returns the value 7.69%. You should take this investment over one offering a 7.3% internal rate of return. 7. Red tracer arrows indicate that the cells connected to the active cell containing errors. 8. The formula points to a worksheet cell that has been deleted....
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern