For each requirement, change the values of the given information as shown and keep all other original data the same. Then enter your updated final answers for each scenario. Scenario A: Future value to be received $ 10,000 Future date received 3 years Discount Rate 6% 10% 16% Scenario B: Annual Cash Receipt $ 5,000 Number of Years 6 years Discount Rate 6% 10% 16% Scenario C: Discount Rate 8% Investment Project Cash Flow Initial Investment $ (6,500) Year 1 $ 700 Year 2 $ 800 Year 3 $ 1,400 Year 4 $ 3,600 Year 5 $ 6,800 Required: a. A company is expecting to receive a lump sum of money at a future date from now. Using the PV formula in Excel, what is the Present Value of that money at three different rates? (Round your answers to 2 decimal places.)
For each requirement, change the values of the given information as shown and keep all other original data the same. Then enter your updated final answers for each scenario. Scenario A: Future value to be received $ 10,000 Future date received 3 years Discount Rate 6% 10% 16% Scenario B: Annual Cash Receipt $ 5,000 Number of Years 6 years Discount Rate 6% 10% 16% Scenario C: Discount Rate 8% Investment Project Cash Flow Initial Investment $ (6,500) Year 1 $ 700 Year 2 $ 800 Year 3 $ 1,400 Year 4 $ 3,600 Year 5 $ 6,800 Required: a. A company is expecting to receive a lump sum of money at a future date from now. Using the PV formula in Excel, what is the Present Value of that money at three different rates? (Round your answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
For each requirement, change the values of the given information as shown and keep all other original data the same. Then enter your updated final answers for each scenario.
Scenario A:
| Future value to be received | $ | 10,000 | |
| Future date received | 3 | years | |
| Discount Rate |
| 6% |
| 10% |
| 16% |
Scenario B:
| Annual Cash Receipt | $ | 5,000 | |
| Number of Years | 6 | years | |
| Discount Rate |
| 6% |
| 10% |
| 16% |
Scenario C:
Discount Rate 8%
| Investment Project | |||
| Initial Investment | $ | (6,500) | |
| Year 1 | $ | 700 | |
| Year 2 | $ | 800 | |
| Year 3 | $ | 1,400 | |
| Year 4 | $ | 3,600 | |
| Year 5 | $ | 6,800 | |
Required:
a. A company is expecting to receive a lump sum of money at a future date from now. Using the PV formula in Excel, what is the Present Value of that money at three different rates? (Round your answers to 2 decimal places.)
Transcribed Image Text:Required:
a. A company is expecting to receive a lump sum of money at a future date from now. Using the PV formula in Excel, what is the
Present Value of that money at three different rates? (Round your answers to 2 decimal places.)
Discount Rate
6%
10%
16%
b. A company is expecting to receive a stream of year-end annual cash payments over multiple years. Using the PV formula in Excel,
what is the Present Value of that money at three different didcount rates? (Round your answers to 2 decimal places.)
Discount Rate
Present Value
6%
10%
16%
Present Value
Transcribed Image Text:c. A company is planning to invest in a project over a 5-year period, but wants to know its financial implications. It expects the cash in-
flow return on the investment to steadily increase over the 5 years. Using the information given, help to determine the Total Net Cash
Flows, the Net Present Value, and the estimated Payback Period. Note: Estimate the payback period to the nearest year. (Round your
Net Cash Flow values to the nearest whole dollar and your final Net Present Value answer to 2 decimal places.)
Investment Project
Initial Investment
Year 1
Year 2
Year 3
Year 4
Year 5
NPV of investment
Estimated Payback Period
Total Net Cash Flow
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