Question
Your old college roommate, Dennis Haydell (F382, Fa09) is trying to get his start-up business off the ground and is looking for investment capital. If
Your old college roommate, Dennis Haydell (F382, Fa09) is trying to get his start-up business off the ground and is looking for investment capital. If you lend him $35,000 today he has promised to make semi-annual repayments of $7,456.57 over three years. Make the appropriate calculation to determine if you should accept this investment if you require a 15% return on this investment. Should you accept this investment? Why?
Note: There are three approaches (Q2a., Q2b., and Q2c.) that can be used to answer this question. Provide all three solutions using the templates below. Place the appropriate values in the proper cells in rows 7, 11, and 15, given the columns as provided below. Note, where relevant, present value answers should be shown as a negative number. Circle the answer. Provide the EXACT Excel function that solves the problem in the space below using cell references throughout. You must use a PENCIL!
Row | Column Letter | ||||||
Number | A | B | C | D | E | F | |
5 | Q2a. |
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6 | m | #Yrs | ARate | PV | PMT | FV | |
7 |
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EXACT EXCEL FUNCTION:
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9 | Q2b. |
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10 | m | #Yrs | ARate | PV | PMT | FV | |
11 |
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EXACT EXCEL FUNCTION:
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13 | Q2c. |
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14 | m | #Yrs | ARate | PV | PMT | FV | |
15 |
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EXACT EXCEL FUNCTION:
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