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
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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