Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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I need the formulas for excel using the PV function

A company is considering a $150,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. Initial investment Required rate of return Required: (a) Compute the net present value of this investment. Period 1 2 3 st 4 5 Totals Initial investment Net present value $150,000 10% Net Cash Flows Verify the value of cell C18 using the NPV function (b) Should the machinery be purchased? $10,000 25,000 50,000 37,500 100,000 $222,500 Present Value of Net Cash Flows
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Transcribed Image Text:A company is considering a $150,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. Initial investment Required rate of return Required: (a) Compute the net present value of this investment. Period 1 2 3 st 4 5 Totals Initial investment Net present value $150,000 10% Net Cash Flows Verify the value of cell C18 using the NPV function (b) Should the machinery be purchased? $10,000 25,000 50,000 37,500 100,000 $222,500 Present Value of Net Cash Flows
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