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a. If the discount rate is 5.7%, what is the present value of the first cash flow stream in column B? What is the future

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a. If the discount rate is 5.7%, what is the present value of the first cash flow stream in column B? What is the future value? Report your results in two different cells using functions in Excel. b. Suppose another investment is identical, except that the cash flows are reversed as in column C. Is this worth more, or less, than the original investment? Calculate PV and FV and comment on the difference. You can type your comment in an adjacent cell, or by using a comment box or text box in Excel. c. If you paid $94000 for the original investment, what average annual rate of return would you earn? What return would you earn on the reversed cash flow? Create a new table in the same worksheet to calculate the return. d. Assuming the discount rate is still 5.7%, would you purchase any of these investments? Indicate by shading the cell of the investment you would be willing to buy and comment in an adjacent cell or by using a comment or text box. \begin{tabular}{|c|r|c} \hline A & \multicolumn{1}{c}{ B } & \multicolumn{1}{c}{C} \\ \hline Period & Cash Flow & Reverse Cash Flow \\ \hline 1 & 45,000 & 12,000 \\ \hline 2 & 35,000 & 15,000 \\ \hline 3 & 25,000 & 25,000 \\ \hline 4 & 15,000 & 35,000 \\ \hline 5 & 12,000 & 45,000 \\ \hline \end{tabular}

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