Question
Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $4,000 at the end of each
Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $4,000 at the end of each of the next three years. The opportunity requires an initial investment of $1,000 plus an additional investment at the end of the second year of $5,000. What is the NPV of this opportunity if the cost of capital is 2% per year? Should Marian take it? Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. I NEED THE FORMULA PLZ AS THIS IS ON EXCEL THANKS GREATLY | |||||
Investment year 0 | $1,000 | ||||
Investment year 2 | $5,000 | ||||
Cash flow years 1-3 | $4,000 | ||||
Number of periods (years) | 3 | ||||
Cost of capital | 2% | ||||
PV of cash inflows | |||||
PV cash outflows | |||||
NPV of investment | |||||
Take opportunity (Yes/No) | |||||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started