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Following is an example of a cash flow timeline developed using the Table Function within MS Word.

Following is an example of a cash flow timeline developed using the Table Function within MS Word. 

Please use this example as a means to develop a similar timeline in your answer to the following question.

Example only:

%

 

5%

6.5%

 

Year

0

1

2

3

 

 

 

 

 

 

CFi

$0

$1,000

$1,000

$1,000

 

Below are the expected cash flows and interest rates expected from an investment over the next ten years. 

Cash flows will occur at the end of the nominated years.

 

Cash Flows

 

Interest Rates

 

Year 0

 

 

Years 1 - 2

8%

 

Year 1

 

 

 

 

 

Year 2

+$ 6,500

 

 

 

 

Year 3

+$ 1,500

 

Years 3 - 8

6%

 

Year 4

 

 

 

 

 

Year 5

 

 

 

 

 

Year 6

-$ 2,500

 

 

 

 

Year 7

 

 

 

 

 

Year 8

 

 

 

 

 

Year 9

+$ 10,000

 

Years 9 - 10

7%

 

Year 10

 

 

 

 

 

i.

Using the Table function within MS Word, draw a time line showing the above cash flows and interest rates (following the example above) (6 marks).

ii.

What will be the value of all these cash flows at each of the following times:

-          Time 1

-          Time 5

-           Time 10

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