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

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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.
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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....
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