Excel Cash Flow Values The first answer was the cell value but the next one is incorrect.

Instructions: Read this then proceed through the cells and information to the right. NEW - NPV Background: You can think of NPV as the base model for the dividend discount method. It is a financial formula commonly used to evaluate mergers, capital acquisitions, and just about every other major financial decision a business may make. Instead of applying the formula strictly to dividends and stock prices NPV is commonly applied to any type of cash flows and has a very straightforward premise. We want to find out the present value of everything we're going to get in the future and compare it to what we have to spend today to make this purchase/acquisition. Ifthe present value of cash inflows is greater than the present value of cash outflows then NPV > O and according to the model we want to make the purchase. If NPV < O then it's going to cost us more than it's worth and we don't want to make the purchase. How it Works - Immediate Cash Outflow: When your cash outflow is immediate half the battle is already finished because you've got your outflows in terms of today's dollars. In this case NPV is calculated as: NPV CFO + + + + + + Where: CFn = Cash Flow in year n r = The appropriate discount rate Using this formula it is VERY important to make sure cash payments are written as negative numbers and cash inflows are written as positive numbers. Given Information Useful Life of the Investment Using Cell References Calculate: Present Value of CFO Present Value of CFL Present Value of CF2 Present Value of CF3 Present Value of CFa Present Value of CFS Present Value of CFs Present Value of CF7 Present Value of CFS 8 Years (1,442,728.00) correct Schedule of Cash Flows (Outflows) Cash Flow (Outflow) Year 1303 Hint: You don't need to use that entire formula, think about what you hie done.