A 1 234 56989 B Reset Parameters $70 7% 7 8 20 Your answer Correct Answer 16 Instructions: Build a model to calculate the present value of receiving 7 cash flows of $70. Assume cash flows start in period 8 and only occur in even years. Hint: Use EVEN to determine which years are even vs odd. Assume a discount rate of 7%. Allow your model to accommodate up to 25 periods. Use your model to answer the following questions: How many years have a cash flow of $0? What is the present value of all cash flows? What is the present value of $1 in year 20? Cash Flow Discount Rate Periods Starting Period Lookup Year 10 11 17 12 18 13 14 Year Cash Flow Present Value of $1 Present Value of Cash Flow 15 1 2 16 17 3 4 18 5 19 6 20 7 21 8 22 9 23 10 24 25 11 12 18 $197.06 $0.26 +
A 1 234 56989 B Reset Parameters $70 7% 7 8 20 Your answer Correct Answer 16 Instructions: Build a model to calculate the present value of receiving 7 cash flows of $70. Assume cash flows start in period 8 and only occur in even years. Hint: Use EVEN to determine which years are even vs odd. Assume a discount rate of 7%. Allow your model to accommodate up to 25 periods. Use your model to answer the following questions: How many years have a cash flow of $0? What is the present value of all cash flows? What is the present value of $1 in year 20? Cash Flow Discount Rate Periods Starting Period Lookup Year 10 11 17 12 18 13 14 Year Cash Flow Present Value of $1 Present Value of Cash Flow 15 1 2 16 17 3 4 18 5 19 6 20 7 21 8 22 9 23 10 24 25 11 12 18 $197.06 $0.26 +
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:A
1
234
56989
B
Reset Parameters
$70
7%
7
8
20
Your answer
Correct Answer
16
Instructions:
Build a model to calculate the present value of receiving 7 cash flows of $70.
Assume cash flows start in period 8 and only occur in even years.
Hint: Use EVEN to determine which years are even vs odd.
Assume a discount rate of 7%.
Allow your model to accommodate up to 25 periods.
Use your model to answer the following questions:
How many years have a cash flow of $0?
What is the present value of all cash flows?
What is the present value of $1 in year 20?
Cash Flow
Discount Rate
Periods
Starting Period
Lookup Year
10
11
17
12
18
13
14
Year
Cash Flow
Present Value of $1
Present Value of Cash Flow
15
1
2
16
17
3
4
18
5
19
6
20
7
21
8
22
9
23
10
24
25
11
12
18
$197.06
$0.26
+
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