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what is the Present Value of an asset that pays the following cash flows, if you can invest them at a rate of return of 5%? Time Period Cash Flow 0 2 4 75 75 75 75 75 Note: this is an ordinary annuity, it is the default assumption for both Excel and your financial calculator. a) Identify the assumptions given in this problem Rate of Return # of years Annual Payment Future Value b) Solve this problem using the PV Function in Excel Present Value c) Solve this problem using the NPV function in Excel. Present Value d) Solve this problem by hand, as follows PV of cash flow in year 1 PV of cash flow in year 2 PV of cash flow in year 3 PV of cash flow in year 4 PV of cash flow in year 5 PV of Cash Flows (years 1:5) e) Solve this problem using your financial calculator: Present Value g) How much would you be willing to pay for this asset today? Explain your reasoning.

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SEE THE SCREENSHOT. ANY DOUBTS, HAPPY TO HELP YOU. THANK YOU. THUMBS UP PLEASE.

Home nert Page Layout Formulas Data Review View dd-Ins Cut E AutoSum ー E ゴWrap Text aCopy в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 C Conditional Format CeInsert Delete Format Formatting as Table Styles2 Clear Sort &Find & Format Painter Clipboard AS145 AR Alignment Number Cells Edting Formula Bar AS AT AU AV AW AY AZ BA BC BD 129 130 e 131 132 133 134 135 136 137 138 139 f 140 141 142 143 144 145 146 147 FINANCIAL CALCULATOR FV PMT 0 -75 5 1 5 RATE C/Y PV 324.71 IF I EXPECT TO EARN 5% OR LESS, I WILL PAY 324.71 TODAY FOR ASSET IF I EXPECT TO EARN MORE THAN 5%, I WILL NOT PAY 324.71 FOR ASSET AS RATE INCREASES PRESENT VALUE DECREASES SO HIGHER THE RATE LOWER THE PRESENT VALUE | CALCULATOR AN OPTIONS fv. ann CAP STRU VALUE BOX DILUTION DOLLAR COST AVGMORTGAGE EXPO Sheeti Sheet2 Shel 18-01-2019

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