Complete each problem in excel. Submit your excel worksheet in EXCEL format so I can see how you solved the problems.

Please MARK or Outline your answers so I can tell where they are.

Problem 1 8 points

You have the plan locked in for the Boat but you need to upgrade the dock at the lake. You need $42,000 in that account in 13 years.

You are able to place $1,450 in to the account at the end of each year. No balance on year 0. First deposit is on year 1.

But, you know that won't get you there.

You are expecing some bonds to mature in 45 years. (start the savings account now.. 6 years from now, you will have $$ from bonds).

If you can get a 3.80% rate on you account (PYCY) how much do you need from your bonds to make this work?

Problem 2 12 Points

Your company is preparing to launch a new product over the next 9 years.

The equipment to make this new product will have an initial cost of $174000 to the company.

At the end of the project, you believe you can get $29000 for the equipment as salvage.

Supplies will cost $1900 the first year and go up by $650 each year.

Maintenance costs start at $1600 the first year and will increase by 1.7% each year

The company expects to make $20500 the first year and this will increase by 2.3% each year.

Create the Cash flow table showing these costs and profits and the net cash flow.

If the interest rate is 3.6%, what will be the NPV of the project?

Tell me the book definition of NPV? Tell me your defition of NP (put that definition in to your own words.)

Problem 3 10 Points

Please examine the provided cash flow table

Year Cash Flow

0 -10P

1 -2P

2 51000

3 3.5P

4 3P

5 -P

6 -24000

7 2.5P

8 46750

Use the goal seek function to answer these questions.

6a. What is the value of P at 4.1% interest to make all of the cash flow transactions balance out?

6b. If P is $14,000 what is the NEW interest rate we will need?