1. Retrieve the file BUFFETTP.XLS. The book value per share of

Berkshire Hathaway Inc. was $19.46 in 1964, as noted in cell

A6. Column D reports the annual growth rate in book value for

the next 52 years.

2. Calculate the book value per share for each year from 1965

through 2016. For example, the computed value in cell E6

equals the original value reported in cell A6 plus the calendar

year growth rate in book value appearing in cell D6. The value

in cell E7 is equal to the computed value in cell E6 plus the

annual growth rate in cell D7. Use the copy command to compute

values for cells E7:E57.

3. Apply the =RATE financial function command in cell F60 to

compute the average annual growth rate in book value per share

from the starting value in cell A6 through the ending value in

cell E57. In applying this command, enter 52 for the total

number of years, zero for PMT and TYPE, and enter a GUESS of

15% or higher.

4. In cell F61 compute the total percentage rate of growth in

book value per share from 1964 to 2016. [Hint: This value is

very large, reflecting Berkshire Hathaway's remarkable record

of owning and investing in companies.]

5. Assume that an investor's proportionate share in Berkshire's

book value was $1,000 at yearend 1964. Apply the =FV financial

function command in cell F62 to calculate the book value

exactly 52 years later. Enter the value computed in cell F60

for RATE. [Hint: The compounded value in cell F62 is very

large.]

6. Apply the =PV financial function command in cell F63 to verify

that the value in cell E57, discounted for 52 years at the

annual rate reported in cell F60, equals the book value per

share in 1964.

The Excel sheet is as follows:

Book Value				End of Year
Per Share			Annual Change	Book Value
in 1964		Year	in Book Value	Per Share
$19.46		1965	23.8%
		1966	20.3%
		1967	11.0%
		1968	19.0%
		1969	16.2%
		1970	12.0%
		1971	16.4%
		1972	21.7%
		1973	4.7%
		1974	5.5%
		1975	21.9%
		1976	59.3%
		1977	31.9%
		1978	24.0%
		1979	35.7%
		1980	19.3%
		1981	31.4%
		1982	40.0%
		1983	32.3%
		1984	13.6%
		1985	48.2%
		1986	26.1%
		1987	19.5%
		1988	20.1%
		1989	44.4%
		1990	7.4%
		1991	39.6%
		1992	20.3%
		1993	14.3%
		1994	13.9%
		1995	43.1%
		1996	31.8%
		1997	34.1%
		1998	48.3%
		1999	0.5%
		2000	6.5%
		2001	-6.2%
		2002	10.0%
		2003	21.0%
		2004	10.5%
		2005	6.4%
		2006	18.4%
		2007	11.0%
		2008	-9.6%
		2009	19.8%
		2010	13.0%
		2011	4.6%
		2012	14.4%
		2013	18.2%
		2014	8.3%
		2015	6.4%
		2016	10.7%
Average Annual Growth Rate in Book Value Per Share:
Cumulative Growth Rate in Book Value Per Share:
Future Value of $1,000 in Book Value from 1964-2016:
(Verify) Present Value in 1964 of Book Value in 2016: I would appreciate it if you could explain the calculations.