D 5 = B D D ▪ = Investment A ↓ A ▪ Investment A Investment B Investment C 3 9 Investment A = Investment B Investment C Formulas 5 Formulas B C Growth Rate (Expected) Year 0 11% $3,000 6% $3,000 4% $3,000 Growth Rate (Expected) Year 0 11% $3,000 D Year 1 Growth Rate (Expected) Year 0 11% $3,000 6% $3,000 4% $3,000 "Take each value in column C and multiply it by its adjacent growth rate in column B (which is 1 plus the percentage expected growth)." ABSOLUTE CELL REFERENCES Year 5 Year 1 #N/A Year 1 Formulas ▼ #N/A #N/A #N/A E #N/A #N/A #N/A ▼ ▼ Year 2 #N/A F Year 2 #N/A #N/A #N/A Year 3 #N/A G H RELATIVE CELL REFERENCES #N/A #N/A #N/A Year 4 ▼ ▼ ▼ #N/A ▼ #N/A #N/A #N/A #N/A "Start in column D, then move across allowing the column to change, and multiply the preceding value by its FIXED growth rate in cell $B$13 (which is 1 plus the percentage expected growth) to get the current valu FIXED COLUMN / RELATIVE ROW CELL REFERENCES Year 3 Year 4 ▼ ▼ ▼ Year 5 Year 6 #N/A #N/A #N/A #N/A Year 6 Year 7 #N/A #N/A #N/A #N/A Year 7 K ▼ #N/A ▼ ▼ #N/A ▼ #N/A ▼ ▼ Year 8 #N/A Year 8 #N/A #N/A #N/A ▼ ▼ Year 9 "Start in column D, then move across, and multiply the preceding value by its growth rate in cell $B22 (which is 1 plus the percentage expected growth) to get the current value." "By changing the growth rate cell from $B$22, etc. to $B22, the row of the growth rate is allowed to change yet remain in column B while filling down to the other two Investments." #N/A Year 9 #N/A #N/A #N/A M ▼ ▼ Year 10 #N/A Year 10 #N/A #N/A #N/A N 0
D 5 = B D D ▪ = Investment A ↓ A ▪ Investment A Investment B Investment C 3 9 Investment A = Investment B Investment C Formulas 5 Formulas B C Growth Rate (Expected) Year 0 11% $3,000 6% $3,000 4% $3,000 Growth Rate (Expected) Year 0 11% $3,000 D Year 1 Growth Rate (Expected) Year 0 11% $3,000 6% $3,000 4% $3,000 "Take each value in column C and multiply it by its adjacent growth rate in column B (which is 1 plus the percentage expected growth)." ABSOLUTE CELL REFERENCES Year 5 Year 1 #N/A Year 1 Formulas ▼ #N/A #N/A #N/A E #N/A #N/A #N/A ▼ ▼ Year 2 #N/A F Year 2 #N/A #N/A #N/A Year 3 #N/A G H RELATIVE CELL REFERENCES #N/A #N/A #N/A Year 4 ▼ ▼ ▼ #N/A ▼ #N/A #N/A #N/A #N/A "Start in column D, then move across allowing the column to change, and multiply the preceding value by its FIXED growth rate in cell $B$13 (which is 1 plus the percentage expected growth) to get the current valu FIXED COLUMN / RELATIVE ROW CELL REFERENCES Year 3 Year 4 ▼ ▼ ▼ Year 5 Year 6 #N/A #N/A #N/A #N/A Year 6 Year 7 #N/A #N/A #N/A #N/A Year 7 K ▼ #N/A ▼ ▼ #N/A ▼ #N/A ▼ ▼ Year 8 #N/A Year 8 #N/A #N/A #N/A ▼ ▼ Year 9 "Start in column D, then move across, and multiply the preceding value by its growth rate in cell $B22 (which is 1 plus the percentage expected growth) to get the current value." "By changing the growth rate cell from $B$22, etc. to $B22, the row of the growth rate is allowed to change yet remain in column B while filling down to the other two Investments." #N/A Year 9 #N/A #N/A #N/A M ▼ ▼ Year 10 #N/A Year 10 #N/A #N/A #N/A N 0
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:D
5
=
B
D
D
▪
= Investment A
↓
A
▪
Investment A
Investment B
Investment C
3
9
Investment A
= Investment B
Investment C
Formulas
5 Formulas
B
C
Growth Rate
(Expected) Year 0
11% $3,000
6% $3,000
4% $3,000
Growth Rate
(Expected) Year 0
11% $3,000
D
Year 1
Growth Rate
(Expected) Year 0
11% $3,000
6% $3,000
4% $3,000
"Take each value in column C and multiply it by its adjacent growth rate in column B (which is 1 plus the percentage expected growth)."
ABSOLUTE CELL REFERENCES
Year 5
Year 1
#N/A
Year 1
Formulas
▼
#N/A
#N/A
#N/A
E
#N/A
#N/A
#N/A
▼
▼
Year 2
#N/A
F
Year 2
#N/A
#N/A
#N/A
Year 3
#N/A
G
H
RELATIVE CELL REFERENCES
#N/A
#N/A
#N/A
Year 4
▼
▼
▼
#N/A
▼ #N/A
#N/A
#N/A
#N/A
"Start in column D, then move across allowing the column to change, and multiply the preceding value by its FIXED growth rate in cell $B$13 (which is 1 plus the percentage expected growth) to get the current valu
FIXED COLUMN / RELATIVE ROW CELL REFERENCES
Year 3
Year 4
▼
▼
▼
Year 5
Year 6
#N/A
#N/A
#N/A
#N/A
Year 6
Year 7
#N/A
#N/A
#N/A
#N/A
Year 7
K
▼ #N/A ▼
▼ #N/A ▼
#N/A
▼
▼
Year 8
#N/A
Year 8
#N/A
#N/A
#N/A
▼
▼
Year 9
"Start in column D, then move across, and multiply the preceding value by its growth rate in cell $B22 (which is 1 plus the percentage expected growth) to get the current value."
"By changing the growth rate cell from $B$22, etc. to $B22, the row of the growth rate is allowed to change yet remain in column B while filling down to the other two Investments."
#N/A
Year 9
#N/A
#N/A
#N/A
M
▼
▼
Year 10
#N/A
Year 10
#N/A
#N/A
#N/A
N
0
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