Question: Hi, can you please help me solve this questions by using excel and formulas. thank you! 56 10.00% 60 57 For problems 5&6 use required

Hi, can you please help me solve this questions by using excel and formulas. thank you! Hi, can you please help me solve this questions by using excel

56 10.00% 60 57 For problems 5&6 use required nominal annual return: s. 5. Consider the following end-of-year cash flows: 54 Year Cash flow 0 $0.00 1 $40.00 2 $60.00 3 $60.00 Present Value 45 a. What is the present value of these cash flows (in year 0)? 61 62 66 67 b. If the purchase price of this investment is $140 today, would you buy it? Why? (Compare instrinsic value to actual price) 68 69 70 71 12 73 74 75 * c. What is the expected rate of return on this investment if the purchase price is $140? 77 Year Cash flow Internal Rate of Return 0 -$140.00 79 $40.00 2 $60.00 $60.00 78 1 3 $2 . d. Would you buy this investment based on your answer to part c. and why? * (Compare expected return to required return). 85 86

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