For each requirement, change the values of the given information as shown and keep all other original data the same. Then enter your updated final answers for each scenario.Scenario A: Future value to be received$10,000 Future date received 3years Discount Rate6%10%16% Scenario B: Annual Cash Receipt$5,000 Number of Years 6years Discount Rate6%10%16% Scenario C:Discount Rate 8%Investment ProjectCash FlowInitial Investment$(6,500) Year 1$700 Year 2$800 Year 3$1,400 Year 4$3,600 Year 5$6,800 Required:a. A company is expecting to receive a lump sum of money at a future date from now. Using the PV formula in Excel, what is the Present Value of that money at three different rates? (Round your answers to 2 decimal places.) **Required:**a. A company is expecting to receive a lump sum of money at a future date from now. Using the PV (Present Value) formula in Excel, what is the Present Value of that money at three different rates? *(Round your answers to 2 decimal places.)*| Discount Rate | Present Value ||---------------|---------------|| 6% | || 10% | || 16% | |b. A company is expecting to receive a stream of year-end annual cash payments over multiple years. Using the PV formula in Excel, what is the Present Value of that money at three different discount rates? *(Round your answers to 2 decimal places.)*| Discount Rate | Present Value ||---------------|---------------|| 6% | || 10% | || 16% | | ### Investment Project AnalysisA company is planning to invest in a project over a 5-year period but wants to know its financial implications. It expects the cash inflow return on the investment to steadily increase over the 5 years. Using the information given, determine the Total Net Cash Flows, the Net Present Value, and the estimated Payback Period.**Instructions:**- Estimate the payback period to the nearest year.- Round your Net Cash Flow values to the nearest whole dollar and your final Net Present Value answer to 2 decimal places.#### Investment Project Table| Investment Project | Total Net Cash Flow ||-------------------------|---------------------|| Initial Investment | || Year 1 | || Year 2 | || Year 3 | || Year 4 | || Year 5 | || NPV of Investment | || Estimated Payback Period| |This table is used to calculate and document the financial outlook of the projected investment over the 5-year period.

Present value is calculated when we have information about either the future amount or the annual payments or receipts at a fixed rate of return and the total period to get that future value is given but the investor wants to know the present value of the investment as of today. The payback period is the period taken by an investor to achieve the break-even point in terms of recovering the Initial Investment cost through the annual cash flows.a. Calculation: Formula snip:b. Calculation: Formula snip:c. 1. Calculation of NPV: Formula snip: 2. Calculation of Payback Period: Formula snip:

Answered: For each requirement, change the values…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

For each requirement, change the values of the given information as shown and keep all other original data the same. Then enter your updated final answers for each scenario.

Scenario A:


Future value to be received	$	10,000
Future date received		3	years

Discount Rate

10%

16%

Scenario B:


Annual Cash Receipt	$	5,000
Number of Years		6	years

Discount Rate

10%

16%

Scenario C:

Discount Rate 8%

Investment Project	Cash Flow
Initial Investment	$	(6,500)
Year 1	$	700
Year 2	$	800
Year 3	$	1,400
Year 4	$	3,600
Year 5	$	6,800

Required:

a. A company is expecting to receive a lump sum of money at a future date from now. Using the PV formula in Excel, what is the Present Value of that money at three different rates? (Round your answers to 2 decimal places.)

### Investment Project Analysis

A company is planning to invest in a project over a 5-year period but wants to know its financial implications. It expects the cash inflow return on the investment to steadily increase over the 5 years. Using the information given, determine the Total Net Cash Flows, the Net Present Value, and the estimated Payback Period.

**Instructions:**
- Estimate the payback period to the nearest year.
- Round your Net Cash Flow values to the nearest whole dollar and your final Net Present Value answer to 2 decimal places.

#### Investment Project Table

| Investment Project | Total Net Cash Flow |
|-------------------------|---------------------|
| Initial Investment | |
| Year 1 | |
| Year 2 | |
| Year 3 | |
| Year 4 | |
| Year 5 | |
| NPV of Investment | |
| Estimated Payback Period| |

This table is used to calculate and document the financial outlook of the projected investment over the 5-year period.

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