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Using Excel Please help me to solve this. Given the following set of cash flows: Period Cash flows 1 12,000 2 10,000 3 8000 4
Using Excel Please help me to solve this. Given the following set of cash flows:
Period | Cash flows |
1 | 12,000 |
2 | 10,000 |
3 | 8000 |
4 | 6000 |
5 | 4000 |
a. If your required rate of return is 12% per year, what is the present value of the above cash flows? Future value?
b. Now, suppose that you are offered another investment that is identical, except that the cash flows are reversed (i.e., cash flow 1 is 4,000, cash flow 2 is 6,000, etc.). Is this investment worth more, or less, than the original? Why?
c. If you paid $25,000 for the original investment, what average annual rate of return would you earn?
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