Question
a. Why does cell B7 have an $125,000 cash outflow, whereas cell G10 shows the same $125,000 as a cash inflow? b. Will the value
a. Why does cell B7 have an $125,000 cash outflow, whereas cell G10 shows the same $125,000 as a cash inflow?
b. Will the value of 1.000 that is shown in cell B15 stay constant or change as the Excel template is used to calculate the internal rate of return? Why?
c. Will the values of 1.000 that are shown in cells C15 through G15 stay constant or change as the Excel template is used to calculate the internal rate of return? Why?
d. Will the discount factors in cells C15 through G15 increase or decrease as the discount rate in cell B3 increases? Why?
e. Once the discount rate in cell B3 is changed to some percentage greater than zero, will the amount shown in cell C16 always be greater than or less than the amount shown in cell F16? Why?
f. Would it be correct to conclude that this project has a net present value of $345,000 given that this is the amount currently shown in cell B17? Why?
g. Once this template has been used to calculate the internal rate of return, what dollar amount will appear in cell B17?
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