Function: NPV; Formula: Add, Subtract; Cell Referencing Using Excel to Determine the Net Present Value PROBLEM Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. Amusement parks need to rotate exhibits to keep people interested. Additional information concerning the potential investment follows. Original cost of investment Estimated sales value at end of 5 years Expected increase in annual cash flows Estimated useful life in years Borrowing rate Cost of capital $ 136,000 60,000 25,000 5 years 8.0% 10.0% Student Work Area Required: Provide input into cells shaded in yellow in this template. Use the NPV function with mathematical formulas and cell referencing to the Problem area in the input cells. Calculate the net present value of this project to the company using Excel's NPV function. Net present value

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
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Function: NPV; Formula: Add, Subtract; Cell Referencing
Using Excel to Determine the Net Present Value
PROBLEM
Thunder Corporation, an amusement park, is considering a capital
investment in a new exhibit. Amusement parks need to rotate exhibits
to keep people interested. Additional information concerning the
potential investment follows.
Original cost of investment
Estimated sales value at end of 5 years
Expected increase in annual cash flows
Estimated useful life in years
Borrowing rate
Cost of capital
$ 136,000
60,000
25,000
5 years
8.0%
10.0%
Student Work Area
Required: Provide input into cells shaded in yellow in this template. Use the NPV
function with mathematical formulas and cell referencing to the Problem area in the
input cells.
Calculate the net present value of this project to the company using Excel's NPV
function.
Net present value
Transcribed Image Text:Function: NPV; Formula: Add, Subtract; Cell Referencing Using Excel to Determine the Net Present Value PROBLEM Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. Amusement parks need to rotate exhibits to keep people interested. Additional information concerning the potential investment follows. Original cost of investment Estimated sales value at end of 5 years Expected increase in annual cash flows Estimated useful life in years Borrowing rate Cost of capital $ 136,000 60,000 25,000 5 years 8.0% 10.0% Student Work Area Required: Provide input into cells shaded in yellow in this template. Use the NPV function with mathematical formulas and cell referencing to the Problem area in the input cells. Calculate the net present value of this project to the company using Excel's NPV function. Net present value
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