Question

graph the NPV profile on excel. (step by step)

un - wniom Cash flow ($800) 100 150 Return: $44.79 <= NPV Yes accept since NPV is positive.

Answer 1

Cash flows -800 100 wN 3 150 200 250 300 Return NPV 5% $44.79 Step 1: Create a coloumn of interest rates for which you want to plot NPV profile 1% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0%

Step 2: Create a table with the following interest rates and in a row above the interest rates, give reference of the NPV calculated above $44.79 =B10 1% 1.5% 2.0% 2.5% 3.0% 3.5% Data Table ? 4.0% 4.5% Row input cell: 5.0% Column input cell: $B$9 5.5% X 6.0% D OK Cancel 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% Step 3: Click on Data tab above < What if analysis <Data table

Step 2: Create a table with the following interest rates and in a row above the interest rates, give reference of the NPV calculated above $44.79 =B10 1% 165.85713 1.5% 149.40898 NPV PROFILE 2.0% 133.3596 2.5% 117.69696 3.0% 102.40949 3.5% 87.486011 4.0% 72.91573 4.5% 58.688243 5.0% 44.793505 5.5% 31.221817 6.0% 17.963813 6.5% 5.0104481 1 0% 2% 4% 7.0% -7.647015 7.5% -20.01702 8.0% -32.10771 Interest rate 8.5% -43.92699 9.0% -55.48247 9.5% -66.78151 10.0% -77.83125 NPV 10% 12% Step 3: Click on Data tab above < What if analysis <Data table Step 4: Plot the above values of NPV with interest rate