find the present values of the above cash flows using Insert Page Layout Formula

Question

find the present values of the above cash flows using Insert Page Layout Formulas Data Review View X Cut Copy Formar BI U Merge & Center. $ % , COMPUTING THE PRESENT VALUE OF CONSTANT FLOws Discount Rate 10% Year Cash flow PVCash Flows) Hint: Use the following formula to find the cash flow for each cash flow S 100.00 $ 100.00 $ 100.00 S 100.00 S 100.00 CF 3 4 Find the present values of the above cashflows using: 5 Summing PV(Cash Flows) 6 Using NPV function 7 Using PV function 1 23 24 25 26 27 28 29 30 31 32 28

Explanation / Answer

1. Computation of Present value of cash flows

2. Computation of Net present value

3.

Present value of cash flows = $1000 * 3.79079 (PV of annuity of 10% for 5 years)

= $3790.79.

Year Cash flows Discount rate 10% Present value of cash flows 1 $100 0.909 $90.9 2 $100 0.826 $82.6 3 $100 0.751 $75.1 4 $100 0.683 $68.3 5 $100 0.620 $62.0

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