Calculating Present Values and Multiple Cash Flows

1. Calculating Present Values: For each of the following compute the present value. Answer in Excel.

Present Value____Years____Interest Rate____Future Value
?_______________6__________7%_________$13,827
?_______________9__________15__________$43,852
?_______________19_________11__________$725,380
?_______________23_________18__________$590,710

2. Calculating Interest Rates: Solve for the unknown interest rate in each of the following: Answer in Excel
Present Value____Years____Interest Rate____Future Value
$__ 242___________4__________?_________$_____307
$__ 410___________8__________?_______________896
$51,700__________16__________?__________$162,181
$18,750__________27__________?__________$483,500

3. Calculating the Number of Periods: Solve for the unknown number of years in each of the following: Answer in Excel
Present Value____Years____Interest Rate____Future Value
$___625__________?___________9%_______$__1,284
$___810__________?__________11_________$__4,341
$18,400___________?_________17__________$402,662
$21,500___________?__________8__________$173,439

4. Present Value and Multiple Cash Flows: Farley Company has identified an investment project with the following cash flows. Answer in Excel
Year________Cash Flow
__1_________$960
__2_________$840
__3_________ $935
__4________$1,350

a. If the discount rate is 10 percent, what is the present value of these cash flows?
b. What is the present value at 18 present?
c. At 24 percent?

5. Present Value and Multiple Cash Flows: Investment X offers to pay you $4,500 per year for nine years, whereas Investment Y offers to pay you $7,000 per year for five years.
a. Which of these cash flow streams has the higher present value if the discount rate 5 percent? Explain.
b. If the discount rate is 22 percent?

Solution Summary

Your tutorial is in excel, attached using the PV, RATE, NPER, NPV functions.

Investment X offers to pay you $2,000 per year for 10 years, whereas Investment Y offers to pay you $4,000 per year for 4 years. Which of these cash flow streams has the higher present value if the discount rate is 5%? If the discount rate is 15%?

Please help with the following problem.
What are the cashflows associated with calculating the present value of preferred stock? What are the cashflows associated with calculating the present value of common stock? Why is it more difficult to calculate the present value of common stock than it is to calculate the value of

Problem 1
Toadies, Inc., has identified an investment project with the following cashflows.
Year Cash Flow
1 $ 1,400
2 1,520
3 1,605
4 1,655
If the discount rate is 9 percent, what is the future value of the cashflows in year 4?
If the discount rat

You plan to analyze the value of a potential investment by calculating the sum of the presentvalues of its expected cashflows. Which of the following would lower the calculated value of the investment?
A. The cashflows are in the form of a deferred annuity, and they total to $100,000. You learn that the annuity lasts for

If the appropriate discount rate for the following cashflows is 12.25 percent per year, what is the present value of the cashflows?
Year 1 Cash flow is $1500.
Year 2 cash flow is $3200.
Year 3 cash flow is $7200.
Year 4 cash flow is $9600.

If you put up $21,000 today in exchange for a 9.25 percent, 17-year annuity, the annual cash flow will be $ . (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Your company will generate $61,000 in cash flow each year for the next 9 years from a new information database. The computer system ne

Which of the following is typically not important when calculating the net present value of a project:
a. timing of cashflows from the project
b. income tax effect of cashflows
c. method of financing the project
d. amount of cashflows from the project

Prepare a statement of cashflows using the indirect method. (List multiple entries with a positive cash flow first and then the negative cash flow. List multiple entries in descending order of amount. For negative cashflows, please put amounts in parenthesis.)
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