Task 1 The following are two investment scenarios: Scenario 1: £8,000 at 6.5% with simple interest rate Scenario 2: £5,000 at 6.5% with annual compound interest rate In Excel, draw up a table with the following data: Scenario number, Capital, Interest rate, Type of Interest. Then, please create a dynamic process in the table to calculate the accrued interest each year for 45 years from now on, for each of the scenario. Graph the sums accrued and identify what year the sums accrued swap from one investment being the largest to the other. Task 2 A business has two projects to invest in, as follows: Create a new spread sheet, calculate NPV for the following projects at discount rates of 3% and 7%, respectively, by creating a dynamic process.Project 1 Project 2 Year Cash inflows Cash outflows Cash inflows Cash outflows 0 0.00 70,000.00 0.00 70,000.00 1 24,000.00 13,000.00 25,000.00 15,000.00 2 22,000.00 1,000.00 25,000.00 - 3 25,000.00 - 20,000.00 - 4 25,000.00 - 43,000.00 21,000.00 5 17,500.00 7,500.00 20,000.00 5,000.00 P1: NPV P2: NPV Then, a) by using a built-in/Excel function, calculate the NPV for each project with discount rates of 3% and 7%, respectively; b) By comparing the NPVs at the rate of 3%, which project gives the better return to the company; c) Construct a table to show the NPV for the above selected project i.e. the project gives the better return) for a range of discount rates between 3% and 16%; d) Construct a graph to estimate the IRR using your table; e) Confirm the estimate made in step d) using the built-in/Excel IRR function. (I only need task 2 please!) Do not worry about task 1. Thank you!
Task 1
The following are two investment scenarios:
Scenario 1: £8,000 at 6.5% with simple interest rate
Scenario 2: £5,000 at 6.5% with annual
In Excel, draw up a table with the following data: Scenario number, Capital,
Interest rate, Type of Interest. Then, please create a dynamic process in the table
to calculate the accrued interest each year for 45 years from now on, for each of
the scenario.
Graph the sums accrued and identify what year the sums accrued swap from one
investment being the largest to the other.
Task 2
A business has two projects to invest in, as follows:
Create a new spread sheet, calculate
rates of 3% and 7%, respectively, by creating a dynamic process.Project 1 Project 2
Year
0 0.00 70,000.00 0.00 70,000.00
1 24,000.00 13,000.00 25,000.00 15,000.00
2 22,000.00 1,000.00 25,000.00 -
3 25,000.00 - 20,000.00 -
4 25,000.00 - 43,000.00 21,000.00
5 17,500.00 7,500.00 20,000.00 5,000.00
P1: NPV P2: NPV
Then,
a) by using a built-in/Excel function, calculate the NPV for each project
with discount rates of 3% and 7%, respectively;
b) By comparing the NPVs at the rate of 3%, which project gives the better
return to the company;
c) Construct a table to show the NPV for the above selected project i.e. the
project gives the better return) for a range of discount rates between 3%
and 16%;
d) Construct a graph to estimate the
e) Confirm the estimate made in step d) using the built-in/Excel IRR
function.
(I only need task 2 please!) Do not worry about task 1. Thank you!
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