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    Financial Pre-Test Problems

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    I am looking for the way to solve these by hand and in Excel, and also the proper answer:

    1. Suppose that the following cash flows are received:

    0 = -$500, 1 = $200, 2 = $200, 3 = $200

    The Internal Rate of Return on the cash flows (rounded to the nearest percent) is
    8%, 9%, 10%, 11%, or 12%

    2. A 10-year bond paying 8% annual coupons pays $1000 at maturity. If the required rate of return on the bond is 7%, then today the bond will sell (rounded to the nearest cent) for
    $1000.00
    $1210.45
    $987.48
    $1070.24

    3. The annual revenue-growth rates for a new tech star tup during its first 4 years of operations were as follows:

    1 = 50, 2 = 50, 3 = -50, 4 = -50

    Rounded to the nearest tenth of one percent, the start up's 4-year Compound Annual Growth Rate was
    -13.4% or -10.5%

    4. Last year, a barber shop generated $100,000 in profit. Assume that the shop's profits grow at 5% per year and that cash flows are discounted at 10% per year. If profits are received at the end of each year, what is the present value of all the shop's future profits?
    $2,100,000
    $3,000,000

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    https://brainmass.com/business/finance/financial-pre-test-problems-552044

    Solution Preview

    See the attached file for proper formatting. Thanks

    I am looking for the way to solve these by hand and in Excel, and also the proper answer: 

    1.  Suppose that the following cash flows are received: 
    0 = -$500, 1 = $200, 2 = $200, 3 = $200 
    The Internal Rate of Return on the cash flows (rounded to the nearest percent) is 
    8%, 9%, 10%, 11%, or 12% 
    Solution
    Year Cash Flow
    0 ($500)
    1 $200
    2 $200
    3 $200 ...

    Solution Summary

    Financial pre test problems for cash flows received are given.

    $2.19