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80 Points Draw and solve the Cash Flow Diagram for Future Value “F12. The data below is a 10 year Cash Flow, and interest ra

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Answer #1

Cash Flow table

Year Investment Annual income Annual maint. salvage value software upgrade income Net Cash Flow
0 -10000 -10000
1 2000 0 750 2750
2 2000 -400 1600
3 2000 -400 1600
4 2000 -400 1600
5 2000 -400 1600
6 2000 -400 1600
7 2000 -400 1600
8 2000 -400 -2500 -900
9 2000 -400 1600
10 2000 -400 1500 3100

CFD

6000 4000 2000 income software upgrade 10 -2000+ 1 2 3 4 5 6 7 8 9 10 salvage value -4000 Annual maint. Annual income -6000 I

We will use NPV function and FV function in Excel to find value of F12

Year Investment Annual income Annual maint. salvage value software upgrade income Net Cash Flow
0 -10000 -10000
1 2000 0 750 2750
2 2000 -400 1600
3 2000 -400 1600
4 2000 -400 1600
5 2000 -400 1600
6 2000 -400 1600
7 2000 -400 1600
8 2000 -400 -2500 -900
9 2000 -400 1600
10 2000 -400 1500 3100
F12 3,648.55

Showing formula in excel

Year Investment Annual income Annual maint. salvage value software upgrade income Net Cash Flow
0 -10000 =E2+F2+G2+H2+I2+J2
1 2000 0 750 =E3+F3+G3+H3+I3+J3
2 2000 -400 =E4+F4+G4+H4+I4+J4
3 2000 -400 =E5+F5+G5+H5+I5+J5
4 2000 -400 =E6+F6+G6+H6+I6+J6
5 2000 -400 =E7+F7+G7+H7+I7+J7
6 2000 -400 =E8+F8+G8+H8+I8+J8
7 2000 -400 =E9+F9+G9+H9+I9+J9
8 2000 -400 -2500 =E10+F10+G10+H10+I10+J10
9 2000 -400 =E11+F11+G11+H11+I11+J11
10 2000 -400 1500 =E12+F12+G12+H12+I12+J12
F12 =FV(7%,12,,-(NPV(7%,K3:K12)+K2))
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