Calculate the present value of amount

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This is an Excel assignment.

Time Value of Money

Assume a company has an initial cash outflow of $150,000, followed by after-tax cash inflows as follows. Assume the company's required rate of return is 10%

   _0_________1_______2_______ 3_______4_______5_____ 

(150,000)        25,000     35,000    40,000     45,000    50,000         

  1. Using the time line shown above, calculate the Present Value of each amount (e.g., the present value of $25,000, present value of $35,000, etc.).
  2. Using the time line shown above, calculate the Net Present Value for this project, using the Excel formula for NPV as discussed in class.

Loan Amortization

Assume you are taking out a loan for $150,000 at a nominal rate of interest of 4%, with payments to be made annually over a period of 10 years. The first payment will be made one year from now. 

Set up a loan amortization schedule showing the annual payments and the amount of principal and interest for each payment. Also show the ending balance of the loan after each payment is made.

Reference no: EM131862127

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