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Need help with answers missing in yellow highlighted areas. 94 However, even though Excel has a built-in NPV formula, it assumes the first time period
Need help with answers missing in yellow highlighted areas.
94 However, even though Excel has a built-in NPV formula, it assumes the first time period is 1 . This differs from 95 our templates because the first time period is actually 0 . Meaning time starts immediately upon purchase with 96 the first cash flow coming one year later. Therefore, we will switch to our financial calculators. 97 (There is a function in Excel, XNPV, that allows us to assign specific dates to each cash flow, but we're not using it.) 98 99 Please use your financial calculator to calculate the NPV of our projected cash flow stream using 100 the original 15% discount rate with the $1,100,000 purchase price. 113 114 Recall from the introduction that NPV is the price paid subtracted from the value. 115 Our value at 15% was $1,037,014, our price paid was $1,100,000. 119 Using the same cash flow stream, but with a $1,000,000 purchase price, 120 what is the calculated NPV? 121 NPV =37014 123 Again, our value at 15% was $1,037,014 but this time we paid only $1,000,000. 12437014Step by Step Solution
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