NPV Crossover
xlsx
keyboard_arrow_up
School
West Chester University of Pennsylvania *
*We aren’t endorsed by this school
Course
399
Subject
Finance
Date
Jan 9, 2024
Type
xlsx
Pages
11
Uploaded by williamboswell222
NPV Profile and Crossover (Problem 12)
Spring 2022
This worksheet requires you to use Excel's NPV and IRR functions. In addition, you will
use Excel's Data Table and charting tools to create an NPV profile and identify the
crossover rate for two projects.
Correct answers will appear in a
blue
font.
Cash Flow Analysis
Interest Rate:
9.00%
A.
Find the net present value of the following annual cash flows. Use an interest rate of 10%.
Please show the present value of each individual cash flow, and the total present value.
Time
1
2
3
4
5
6
Cash Flow
574
864
1,246
2,748
3,367
2,437
Present Values
Total Present Value
B.
Assume this project costs $10,000.
What is the NPV?
Project Cost:
$
10,000
Use the Excel net present value function to solve the same problem.
D.
Use the Excel IRR function to calculate the project's IRR.
0
1
2
3
4
5
6
$
(10,000)
574
864
1,246
2,748
3,367
2,437
E.
Use the Excel "Goal Seek" tool to calculate the project's IRR.
0
1
2
3
4
5
6
$
(10,000)
574
864
1,246
2,748
3,367
2,437
NPV
https://youtu.be/f0F8pX0rToE
Step 1:
Enter a formula to calculate the NPV in cell
B30.
Reference the interest rate in cell
G1.
Step 2:
Go to "Tools" on the main menu and then
to "Goal Seek"
enter the information
shown in the screen print to the right.
7
8
9
10
2,276
1,839
1,264
623
7
8
9
10
2,276
1,839
1,264
623
7
8
9
10
2,276
1,839
1,264
623
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
NPV Profile and Crossover (Problem 12)
To use Goa
Discount Rate
11.00%
1) Click on
2) Click on
Project A
Project B
3) Select "G
Cash Flow
Cash Flow
0
(37,000)
(37,000)
1
19,000
6,000
2
14,500
12,500
3
12,000
19,000
4
9,000
23,000
Total
17,500
23,500
IRR
NPV
###
Difference in Project NPV's (B-A)
Present Value
Cash Flow
Present Value
Cash Flow
https://youtu.be
Use Excel's "Goal Se
the discount rate (c
NPV of the projects
difference (cell G19
The Crossover rate is
###
###
Procject
A
Project B
NPV
0%
Step 1: Highlight cells C32:D63
1%
Step 2: On the "Data" tab select "What-if-Analysis",
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
Use Excel's "data table" feature to complete
this NPV table, and then use the "Chart"
feature to prepare an NPV profile for the two
projects. Your chart should look like figure 9-8
from the text.
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
25%
26%
27%
28%
29%
30%
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
al Seek:
n the "Data" tab
n "What-if analysis"
Goal Seek"
e/IvXBKhMENIc
eek" funtion to find
cell D3) that makes the
s equal. That is the
9) equal to zero.
then "Data Table".
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Related Documents
Related Questions
in
1. Calculate the Annual rate of return.
Solving for Rates - Excel
HOME
INSERT
PAGE LAYOUT
FORMULAS
DATA
REVIEW
VIEW
Calibri,
BIU - A- Alignment Number Conditional Format as Cll
Formatting Table Styles
国
Paste
Cipboard
H.
1.
D.
E.
C.
3.
What annual rate of return is earned on a $5,000 investment when
it grows to $10,750 in six years? (Do not round intermediate
calculations and round your final answer to 2 decimal places.
Present value
Future value
Number of periods
0000
2410,750
Complete the following analysis. Do not hard code values in your
calculations.
28 of 40
ere to search
%23
arrow_forward
You expect to receive two cash flows: $41,000 paid in 5 years and $61,500 paid in 10 years. You'll put the money into a savings account with an annual interest rate of 8%.
What is the future value of the combined cash flows, in 15 years?
Please Introduction and explanation without plagiarism please and use math tools plZ
arrow_forward
Find the profitability index of a project with the following cash flows using a discount rate of
4%:
Period 0: -1000
Period 1: 793
Period 2: 391
Period 3: 204
Round your answer to the nearest one-hundredth.
arrow_forward
urgent please
arrow_forward
Can you tell me how to get the 0% to 25% rate numbers? I have to plot the NPV profiles.
Year
Project A
Discounted cashflow
Discounted cashflow
0
-50,000
-$50,000.00
-$50,000.00
1
25,000
$22,727.27
$23,584.91
2
20,000
$16,528.93
$17,799.93
3
10,000
$7,513.15
$8,396.19
4
5,000
$3,415.07
$3,960.47
5
5,000
$3,104.61
$3,736.29
NPV
$3,289.02
$7,477.79
IRR
14%
14%
10%
6%
Year
Project B
Discounted cashflow
Discounted cashflow
0
-50,000
-$50,000.00
-$50,000.00
1
15,000
$13,636.36
$14,150.94
2
15,000
$12,396.69
$13,349.95
3
15,000
$11,269.72
$12,594.29
4
15,000
$10,245.20
$11,881.40
5
15,000
$9,313.82
$11,208.87
NPV
$6,861.80
$13,185.46
IRR
15%
15%
Rate
Project A
Project B
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
25%
arrow_forward
Please show excel formulas
arrow_forward
2
arrow_forward
Determine the value of W on the right-hand side of the accompanying diagram that makes the two cash-flow diagrams equivalent when /=9% per year.
Q
$1,150
30
1
2
End of Year
$1,150
3
4
5
$1,150
W
Click the icon to view the interest and annuity table for discrete compounding when i=9% per year.
End of Year
The equivalent amount, "W", of the cashflows provided in the diagram is $ 1739. (Round to the nearest dollar.)
W
OU
arrow_forward
The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below.
Do not round intermediate calculations. Enter your answers as positive values.
Download spreadsheet Time value of money-e826d2.xlsx
a. Find the FV of $1,000 invested to earn 12% after 6 years. Round your answer to the nearest cent.
$.
b. What is the investment's FV at rates of 0%, 6%, and 20% after 0, 1, 2, 3, 4, and 5 years? Round your answers to the nearest cent.
Interest Rate
Year
0%
6%
20%
$
2$
1
$
24
$
2
$
$
2$
$4
$
$
4
$
2$
$
$
Choose the correct graph of future value as a function of time and rate. Note: blue line is for 0%, orange line is for 6%, and grey line is for 20%.
The correct graph is
A
7000
FV as Function of Time and Rate
arrow_forward
What is the present value of the following cash flows, if the discount rate is 10% annually?
(If you can type solutions or calculations in EXCEL, it would be great! Thanks!)
arrow_forward
Vala
arrow_forward
Using a present value table, your calculator, or a computer program present value function, answer the following questions: See Table 6-4 and Table 6-5 (Use the appropriate factor by clicking on the appropriate Table links.)Required:
What is the present value of nine annual cash payments of $2,000, to be paid at the end of each year using an interest rate of 4%?
What is the present value of $20,000 to be paid at the end of 22 years, using an interest rate of 16%?
How much cash must be deposited in a savings account as a single amount in order to accumulate $300,000 at the end of 10 years, assuming that the account will earn 8% interest?
How much cash must be deposited in a savings account (as a single amount) in order to accumulate $50,000 at the end of 12 years, assuming that the account will earn 12% interest?
Assume that a machine was purchased for $55,900. Cash of $15,300 was paid, and a four-year, 12% note payable was signed for the balance.
Prepare the horizontal model and…
arrow_forward
I need the manual excel formula as well as the FV Excel Function.
C. Suppose you save $2,800 a year for 43 years into an investment account that earn 8.5% return, how much will you have at the end of the periods?
Formula
$ ???
Excel Functon
$1,066,616.08
arrow_forward
Photo from MR. A
arrow_forward
Your investment will pay you the
following cash flow stream: YEAR |
CASH FLOW 1 |200 2 10 3 100 4 100
If your required rate of return is 12%,
what is the value (i. e., present value
) of this investment at time 0? What
is the future value at the end of year
7? Please explain in steps to input on
BA II Plus calculator
arrow_forward
Need some assistance with this econs problem
arrow_forward
Calculate the EAR of the following investment, entered as a percentage (Example: if your answer is 0.145, enter 14.5)
Year Number
Cashflow
0
-11400
1
3500
2
3000
3
3100
4
2800
Your Answer:
arrow_forward
in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working!!!!!!!
arrow_forward
What is the present value of the following stream of cash
flows if the discount rate is 9%?
Year 1-5: $14,000 inflow
Years 6-20: $23,000 inflow
(Use the present value tables in your course packet for any
present value calculations. Round your final answer to the
nearest dollar.)
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you
Related Questions
- in 1. Calculate the Annual rate of return. Solving for Rates - Excel HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Calibri, BIU - A- Alignment Number Conditional Format as Cll Formatting Table Styles 国 Paste Cipboard H. 1. D. E. C. 3. What annual rate of return is earned on a $5,000 investment when it grows to $10,750 in six years? (Do not round intermediate calculations and round your final answer to 2 decimal places. Present value Future value Number of periods 0000 2410,750 Complete the following analysis. Do not hard code values in your calculations. 28 of 40 ere to search %23arrow_forwardYou expect to receive two cash flows: $41,000 paid in 5 years and $61,500 paid in 10 years. You'll put the money into a savings account with an annual interest rate of 8%. What is the future value of the combined cash flows, in 15 years? Please Introduction and explanation without plagiarism please and use math tools plZarrow_forwardFind the profitability index of a project with the following cash flows using a discount rate of 4%: Period 0: -1000 Period 1: 793 Period 2: 391 Period 3: 204 Round your answer to the nearest one-hundredth.arrow_forward
- urgent pleasearrow_forwardCan you tell me how to get the 0% to 25% rate numbers? I have to plot the NPV profiles. Year Project A Discounted cashflow Discounted cashflow 0 -50,000 -$50,000.00 -$50,000.00 1 25,000 $22,727.27 $23,584.91 2 20,000 $16,528.93 $17,799.93 3 10,000 $7,513.15 $8,396.19 4 5,000 $3,415.07 $3,960.47 5 5,000 $3,104.61 $3,736.29 NPV $3,289.02 $7,477.79 IRR 14% 14% 10% 6% Year Project B Discounted cashflow Discounted cashflow 0 -50,000 -$50,000.00 -$50,000.00 1 15,000 $13,636.36 $14,150.94 2 15,000 $12,396.69 $13,349.95 3 15,000 $11,269.72 $12,594.29 4 15,000 $10,245.20 $11,881.40 5 15,000 $9,313.82 $11,208.87 NPV $6,861.80 $13,185.46 IRR 15% 15% Rate Project A Project B 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25%arrow_forwardPlease show excel formulasarrow_forward
- 2arrow_forwardDetermine the value of W on the right-hand side of the accompanying diagram that makes the two cash-flow diagrams equivalent when /=9% per year. Q $1,150 30 1 2 End of Year $1,150 3 4 5 $1,150 W Click the icon to view the interest and annuity table for discrete compounding when i=9% per year. End of Year The equivalent amount, "W", of the cashflows provided in the diagram is $ 1739. (Round to the nearest dollar.) W OUarrow_forwardThe data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Enter your answers as positive values. Download spreadsheet Time value of money-e826d2.xlsx a. Find the FV of $1,000 invested to earn 12% after 6 years. Round your answer to the nearest cent. $. b. What is the investment's FV at rates of 0%, 6%, and 20% after 0, 1, 2, 3, 4, and 5 years? Round your answers to the nearest cent. Interest Rate Year 0% 6% 20% $ 2$ 1 $ 24 $ 2 $ $ 2$ $4 $ $ 4 $ 2$ $ $ Choose the correct graph of future value as a function of time and rate. Note: blue line is for 0%, orange line is for 6%, and grey line is for 20%. The correct graph is A 7000 FV as Function of Time and Ratearrow_forward
- What is the present value of the following cash flows, if the discount rate is 10% annually? (If you can type solutions or calculations in EXCEL, it would be great! Thanks!)arrow_forwardValaarrow_forwardUsing a present value table, your calculator, or a computer program present value function, answer the following questions: See Table 6-4 and Table 6-5 (Use the appropriate factor by clicking on the appropriate Table links.)Required: What is the present value of nine annual cash payments of $2,000, to be paid at the end of each year using an interest rate of 4%? What is the present value of $20,000 to be paid at the end of 22 years, using an interest rate of 16%? How much cash must be deposited in a savings account as a single amount in order to accumulate $300,000 at the end of 10 years, assuming that the account will earn 8% interest? How much cash must be deposited in a savings account (as a single amount) in order to accumulate $50,000 at the end of 12 years, assuming that the account will earn 12% interest? Assume that a machine was purchased for $55,900. Cash of $15,300 was paid, and a four-year, 12% note payable was signed for the balance. Prepare the horizontal model and…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you