1 Problem 6-13 2 3 Valuation of assets. Using the information provided in the following table, find the value of each asset. 4 5 6 Asset A Appropriate required 18% 7 8 9 10 B 15% 16% 11 12 13 Cash flow End of year Amount 1 $5,000 2 5,000 3 5,000 1 through Y $300 1 - 0 2 - 0 3 -0 4 -0 5 $35,000 1 through 5 $1,500 6 8,500 1 $2,000 2 3,000 3 5,000 4 7,000 5 4,000 14 15 16 D 12% 17 18 E 14% 19 20 21 DAWN 22 1000 24 25 Solution 26 27 28 Asset A End of Year 1 2 3 29 PV of Cash Flows 3 18% Amount $5,000 $5,000 $5,000 N = I = 30 31 32 33 34 35 B 1-Y $300 I = 15% N= I= 5 16% 36 = 37 1 2 3 4 5 - 0 - 0 - 0 - 0 $35,000 38 39 40 D 41 42 43 1-5 6 $1,500 $8,500 N= I= PMT FV 6 12% $1,500 $7,000 44 45 46 E 1 $2,000 I= 14% Problem 6-13 FV = $7,000 44 45 46 49 Points 1 E 1 $2,000 I 14% 47 2 $3,000 48 3 $5,000 4 $7,000 50 5 $4,000 51 6 $1,000 52 53 54 Requirements 1 In cell H29, by using cell references to the given data and the function PV, calculate the value of asset A. Note: The result of your calculation is expected as a positive answer. 2 In cell H33, by using cell references to the given data, calculate the value of asset B. 3 In cell H35, by using cell references to the given data, calculate the value of asset C. Note: The result of your calculation is expected as a positive answer. 4 In cell H41, by using cell references to the given data and the function PV, calculate the 58 value of asset D. Note: The result of your calculation is expected as a positive answer. 5 In cell H46, by using cell references to the given data and the function NPV, calculate the 59 value of asset E. 6 Save the workbook. Close the workbook and then exit Excel. Submit the workbook as 55 56 1 1 57 1 1 60 61 62