Calculate the present value of $100,000 in the given cases

Using the present value function in MS Excel, verify that the present value of $100,000 to be received in five years at an interest rate of 16%, compounded annually, is $47,610. Calculate the present value of $100,000 for each of the following items (parts a-f) using these facts:

a. Interest is compounded semiannually
b. Interest is compounded quarterly
c. A discount rate of 12% is used
d. A discount rate of 20% is used
e. The cash will be received in three years
f. The cash will be received in seven years

Solution Preview

Please refer attached file for better clarity of functions in MS Excel.

Future Value=FV=100,000
Number of periods=NPER= 5
Interest Rate=RATE=16%
Periodic Payment=PMT=0
Type of payment=0
PV can be found by using PV function in MS Excel.
PV= $47,611 =-PV(D8,D7,D9,D6,D10)
Ignoring rounding off errors , we received the same value as given.

a. Interest is compounded semiannually
Future Value=FV=100,000
Number of periods=NPER=5*2=10
Interest ...

Solution Summary

This solution describes the steps to calculate the present values in the given cases, using Excel calculations.

Answer these problems and show your work:
1. Calculatethepresentvalue of the following lump sums:
a. $100,000 to be received five years from now with a 5% annual interest rate
b. $200,000 to be received 10 years from now with a 10% annual interest rate
2. Calculatethe future value of the following lump sums:
a. $100

For each of thecases shown in the following table, calculatethepresentvalue of the cash flow, discounting at the rate given and assuming that the cash flow is received at the end of the period
Case Single Cash Flow Discount rate End of period (Years)
A 7,000 12%

You are considering a five-year lease of office space for R&D personnel. Once signed, the lease cannot be canceled. It would commit your firm to six annual $100,000 payments, with the first payment due immediately. What is thepresentvalue of the lease if your company's borrowing rate is 9% and its tax rate is 35%? (note: the l

Using a 14% cost of capital, calculatethe net presentvalue for each of the independent projects shown in the table and indicate whether each is acceptable.
Project A Project B
Initial investment $26,000 $500,000
Year Cash Inflows
1

You just received notice that you have won the $2 million Indiana Lottery. You will receive $100,000 per year for 20 years with your first payment received today. What is thepresentvalue of these payments if the appropriate discount rate is 8%?

Giventhe following information:
Investment: $ 420,000
Estimated useful life: 7 years.
Straight line depreciation with no salvage value
Annual cash savings $ 100,000
Required:
1. Calculatethe accounting rate of return on initial investment year 1 only.
2. Calculatethe payback period.
3. Calculatethe Internal r

Brooks Enterprises has never paid a dividend. Free cash is projected to be $80,000 and $100,000 for the next 2 years respectively, and after the second year it is expected to grow at a constant rate of 8%. The company's weighted average cost of capital is WACC=12%
a) What is the terminal or horizon value of operations?
b)

The exercise problem the following information to figure prevalence and incidence rate:
Population of the city of Atlantis on March 30th, 2003 = 183,000.
Number of new cases of tuberculosis occurring between january 1st and June 30th, 1003 = 26
Number of active TB cases according to the city register on June 30th, 2003 =

13. The future value of $200 received today and deposited for three years in an account which pays semiannual interest of 8 percent is ______.
A. $253.00
B. $252.00
C. $158.00
D. $134.66
14. The future value of $100 received today and deposited at 6 percent for four years is
A. $126.
B. $ 79.
C. $124.
D. $116.
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