Solve various time value of money scenarios (Click the icon to view the scenaros.) (Click the icon to view the present value of S1 table) Click the icon to view the future value of S1 table) (Click the icon to view the present value of annuity of $1 table) Cick the icon to view the future value of anuity of S1 table) 6. Ray is considering a capital investment that costs $530,000 and will provide the following net cash inflows Year Net Cash Inflow $308,000 $206,000 $98,000 Using a hurdle rate of 8%, find the NPV of the investment. 7. What is the IRR of the capital investment described in Question 6? 28 4675 20 18.046 16.351 14.877 1350 124621170 9815 8514 7469 6623 5.923 3 4 25 22.023 19.523 17413 15622 14.094 12.783 10.675 9077743 6.873 6.097 5487 94 30 25,.808 22.396 19.600 17.292 15.372 13.7611258 9427 8.055 .003 6.177 517 4979 40132.835127355|23.1151 19.793117.159115046111325|9.779 18.24417.105|62331 5548 | 4397 4.979 5.548 4.997 1220 148618062191 26332074616 6727 9646 1 20 13743 19461 27.393 38.338 1.282 1641 20942666 3.36 6.848 0835 7000 26462 40574 6269 95.396 1348 1811 24273243 4322 5743 10.063 7449 29960 09 143 371 237 378 40 1489 2.2083.262 4.801 704010.28621725 45259 9305188.884 378721 7148 7 25 30 27.152 3177237280 43842 16605 203 22019 24.297 2680 29778 33.066 36786 45762 7275 72.052902 115.300 1462 106 60 25 28.243 32.030 36459 4164647275486573 98347 133.334 181871 249 214 342600 71961 34.785 40.56847575 56.085 66.439 79.058 113.283 164 494 241.333 356.787 530 312 790 948 1,181 582 48.886 60.40275.40 95.02600 154.762259.057 442.593767 91 1470 11 Scenario 1 Hvoldprt ht the jackpot in Las Vegas and won S0000 it hervests it now at a 10% interest rale, how much wil it be worth in 15 years? (Rand your arme to te nearest wede dia) Scenario 2 Alan would like to have 3 000,000 saved by the time he retires n years hor much does he need to m est now at a 12% nterest ratetofund ha ten ernent goal? Rendy urr wer totwn mat whtedlr) poscive amount answer to the nearest whole dolar and enter as a Scenarie 4 Dym p into mest 2 000 at the end of each yerfor trent seven yen Assuring a 14% rtmet rade, whi w ser n estr ert benot wen years bo naw? Rudy ur tubio dola) wer tote Future value : Scenano 5 Assuming a 1296 interest rate, how much wuld Tem have to invest now to be able to wteh$14,000 at the end of every your lorthe next tny s? Round your rmer tote nearest 0e dir) Present value a capital investment that costs $530,000 and weill provide Use parentheses or a minus sign to represent a negative NPV.) -$ Net Present Value (NPV) Scenario 7. What is the IRR of the capital investment deseribed in Question 6 henestmer, MPV Owe bied0%"qu-tone-owwel hy 10% and calcul.to fn NPVpaxnd ya, awwer to the nwest wzie dlatUse parer-or a ~ sig, to mpnn. negative NPV.) Net Present Value (NPV) The IRR for the project is i More Info I 1. Harold just hit the jackpot in Las Vegas and won $30,000 if he invests it now at a 10% interest rate, how much will it be worth in 15 years? 2. Alan would like to have $3,000,000 saved by the time he retires in 30 years. How much does he need to invest now at a 12% interest rate to fund his retirement goal? 3. Assume that Vivian accumulates savings of $1 million by the time she retires. If she invests this savings at 10%, how much money will she be able to withdraw at the end of each year for 15 years? 4. Donna plans to invest $2,000 at the end of each year for the next seven years. Assuming a 14% interest rate, what will her investment be worth seven years from now? 5. Assuming a 12% interest rate, how much would Terri have to invest now to be able to withdraw $14,000 at the end of every year for the next ten years? 6. Ray is considering a capital investment that costs $530,000 and will provide the following net cash inflows: Year Net Cash Inflow $308 000 fr $206.000 Print Done Year Net Cash Inflow $308,000 $1 $206,000 $98,000 Using a hurdle rate of 8%, find the NPV of the investment. 7. What is the IRR of the capital investment described in Question 6 ac i Reference $1 Present Value of $1 Periods 1% 2% 13%4%--5%6%|5%- 10% T 12% T 14%116%- 18%--20% 10.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.8620.847 0.833 2 0.980 0.91 0.943 02507 0890 057 0828 0797 0769 0.743 0718 0694 3 0.971 0.942 0.915 0.889 0.864 0.840 0.794 0.751 0.712 0675 0.641 0609 0.579 4 0.961 0.924 0.888 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 5 0.951 0.906 0.863 0.822 0.784 0747 0681 0.621 0.567 0.519 0.476 0.437 0.402 as e neares 6 0.942 0888 0.837 0.790 0746 0705 0630 0.564 0.5070.456 0.410 0.370 0.335 7 | 0.933 | 0.871 | 0.813 | 0.760 | 0711 | 0665 | 0.583 | 0.513 0.452 | 040 0.354 | 0.314 | 0.279 3 ? (Round 8 0.923 0.853 0.789 0.73 0.677 0627 0.5400.467 0404 0.351 0.305 0.266 0.233 9 0.914 0.837 0.766 0.703 0.645 0592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 10 0.905 0.8200.744 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 e end of e 11 0896 0804 0.722 0650 0585 0527 0429 0.350 0.287 0237 0.195 0.162 0.13 12 0.887 0.788 0.701 0.625 0.5570497 0.397 0.319 02570.208 0.168 0.137 0.112 13 0879 0773 0681 0601 0.530 0.469 0368 0290 0229 0.182 0.145 0.116 0.093 14 0.8700758 0661 0577 0.505 0.442 0340 0263 0205 0.160 0.125 0.099 0.078 15 0861 0.743 0642 0555 0481 0417 0315 0239 0183 4 0.108 0.084 0.065 w? (Round end conti Print Done 20 0.820 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 25 0.780 0.610 0.478 0.375 0.295 0.233 0.146 0.092 0.059 0.038 0.024 0.016 0.010 30 0.742 0.552 0.412 0.308 0.231 0.174 0.099 0057 0.033 0.020 0.012 0.007 0.004 40 0.672 0.453 0.307 0.208 0.142 0.097 0.046 0.022 0.011 0.005 0.003 0.001 0.001 Reference Future Value of $1 | 1% | 2% 3% 4% | 5% | 6% | 8% | 10% I 12% Perlods 14% 16% 18% | 20% 1 .160 1180 1.200 1.082 103 1124 166 210 124 1.300 346132 1440 0 1.125 1 119 1260405 1,482 161 1643 1.728 1041 102 1126 1.170 1216 1262 1360 1464 74169 1,8111932074 1.010 .020 1.040 1030 1.050 1060 1080 1.100 1.120 1.140 1020 1040 1.061 1030 1.061 5 1051104 1 726 13381,811 1 1.762 1925 2100 2288 248 1062 11261194 1265 13401419 17772 1974 2195 4627002980 1.230 | 1.316 | 1.407 | 1504 | 1714 | 1949 | 2.211 | 2502 | 2.826 | 3.185 | 3.583 1083 | 1.172 | 1267 | 1369 | 1477 | 1594 | 1851 2144 | 2476 2.853 3.275 3.759 | 4300 1094 | 1195 | 1305 | 1423 | 1551 | 1689 | 1.999 | 2358 | 2.773 3.252 | 3803 | 4435 5.160 1,105 | 1219 | 1344 | 1480 | 1629 | 1791 | 2159 | 2.594 | 3.106 3.707 | 4.411 | 5.234 | 6.192 1243 1384 531710 1,898 33 23 3479 4226 11 6176 740 12 1.127 1268 1426 1601 17962012 2518 3138 96 4818 9367288 8.916 1130 1294 191665 162133 27203452 4363 426886 8.399 10.699 14 1149 1319 113 2 90 2261 2937 3797 47 6261 79810147 128 15 6146 150801209 33172 417474 13174 13407 1072, 1,149 13 Print Done 20 122146 10 2191 2653 07466 627 1806 9646 13743 19461 27.393 38.338 25 1282 11 094 2666 336 422 648 0835 17000 26462 0874 62669 95.396 1.348 1811 24273243 4322 5743 10063 7449 29960 5090 550143371 237 376 7.040 1028 21725 45 29 93051 188 884 378.721 750378 1.459 772 30 40 1489 2 208 3.262 4.801 Present Value of Annulty of $1 Periods 1%12% 13% 1 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 1 0.990 0.980 0.971 0962 09 0943 0926 90693 0877 062 047 33 2 1.970 1.942 1.913 1886 189 1833 1.783 1.736 1.690 1847 1,605 1.566 1,528 3 2.941 2884 2829 2.775 2723 2673 2577 2487 2402 2.322 2246 2174 2106 4 3902 3.808 3,717 3630 3.546 3,465 3312 3.170 3037 2914 278 2690 2.589 5 4.853 4713 4550 4452 4329 4212 3.93 3791 3605 3,433 3274 3,127 2.991 6 5795 5601 5417 242 5076 4917 4623 4355 4111 3.889 3685 3.498 3.326 7 6.728 6472 6230 6005786 5.582 5206 4868 4564 4288 4039 3812 3605 8 7652 7.325 7020 6733 6463 6210 5747 33 4.968 4639 4344 4.078 3837 9 8566 8162 7.786 7435 7108 6802 6247 5759 .328 4946 4.607 4.303 4.031 10 9471 8.983 530 8.111 7722 7360 6,710 6145 5650 5216 4.833 4494 4.192 11 10 368 9.787 9253 760 8306 7.87.139 6493 593 5453 5029 66 4327 12 11.255 10.575 9.954 85 6 34 7536 6814 6194 660 1974793 13 12 134 11348 10635 9986 9394 8853 7904 7.103 6424 5842 5.342 4910 4533 14 13004 12106 1.296 10563 9899 9295 8244 7367 6628 6002 5468 5008 4611 15 13 865 12 849 11.938 11.118 10 380 9712 8.559 7606 6.811 6142 5.575 5.092 4675 e ne (Ro e en nd w? (R 20 18.046 16.351 14.877 13.590 12.462 11470 9818 8514 7469 6623 92 5,353 4.870 25 22023 19 523 17.413 15 622 14.094 12.783 10675 9.077 7843 6873 6.097 5467 4948 50 25 808 22. 396 19 600 17.292 15.372 13765 11258 9427 8055 7003 6177 5517 4979 40 32 833 27 35 23 115 19793 17.159 15.046 1195 9779 8244 7,105 6233 5,548 4997 | 22019 | 24297 | 26870 29778 | 33.066 | 36.786 | 45762 | 57275 1,72052 | 91.025 43.04251.68060965 72035 20 28243 32.030 36.45941646 47 727 4 25 4865 73105 9347 133 334 181.871 249214 342603 471.981 66439 79 058 113283164494 241 333 356.787 530.312 790.948 1,181.882 45.86 60 402 5401 95026 120 800 14.762 259 057 442 593 767 091 1,342 025 2360 757 4163 213 7.343 859s 40 scenarLI1rold just ht the jackpot nLas Vegas and won S30000 if hem ests 4 now at a 10% merest nga how muenvenn, men n iSysas? Ondra seser tone neuest she Future value scenario 2. Alan would like to ha o $3.000,00 saved by tho trne he reties a, 30 renhewmuch des terme b) in ost /om at a 12% rte est nato anndasreiere tgew? Isniyornwer to he teates. utol, fular Pesent value scenario 3. Assume that Vivian accumulates samas of S3 nllon by the tr she rea es " shn rvests ths ungs " 10% row much meney wil she be atie to wtrar " the ir dof each yeab1S yen, fand you arswer to the nearest whole dollar and enter as a positive amout Amount able to thdraw Scenario 4. Donna plans to invest $2,000 at the end of each year for the next seven years. Assuming a 14% interest ate, what wil her r vestment be w th seven years from now Future value$ Scenario 5 Assuming a 12% interest rate how much would Tem have to invest now to be able to withdraw S14.000 at the end of every year for the next ten years, Rond your an Present value $ Scenario 6 Ray is considering a captal investment that costs S 30 000 and wil provide neem u Use parentheses or a minus sign to represent a negative NPV) hemma. Usng a hurde tate of % find the NPV of the nvestment ona o Net Present Value (VPV)s Scenario 7. What is the IRR of the capital investment described in Question 67 O We tried 8% in question 6 now well try 10% and calculate the NPV The IRR is tho interest rate at which the investment NPV bl Rand you answer to the n arest wh negative NPv) Net Present Value (NPV) = $ The IRR for the project is
