PLEASE EXPLAIN THE WORK AND HOW IT IS COMPUTED ON EXCEL FOR INSTANT RATE

Q6.

What is the present value of a perpetual stream of cash flows that pays

$7,500 at the end of year one and the annual cash flows grow at a rate of

43% per year indefinitely, if the appropriate discount rate is

10%? What if the appropriate discount rate is 8%?

6A. IF the appropriate discount rate is 10%, the present value of the growing perpetuity is__?

6b.If the appropriate discount rate is 8%, the present value of the growing perpetuity is ____? $

7. What is the present value of a perpetual stream of cash flows that pays

$10,000 at the end of year one and then grows at a rate of 6% per year indefinitely? The rate of interest used to discount the cash flows is 13%.

The present value of the growing perpetuity is ?

8. As a result of winning the Gates Energy Innovation Award, you are awarded a growing perpetuity. The first payment will occur in a year and will be for $30,000. You will continue receiving monetary awards annually with each award increasing by 5 percent over the previous award, and these monetary awards will continue forever. If the appropriate interest rate is 13 percent, what is the present value of this award?

The present value of the award is___?

9.You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:

Investment Alternatives
End of Year	A		B		C
1	$	20,000			$	20,000
2		20,000
3		20,000
4		20,000
5		20,000	$	20,000
6				20,000		100,000
7				20,000
8				20,000
9				20,000
10				20,000		20,000

Assuming an annual discount rate of 19 percent, find the present value of each investment.

A. What is the present value of investment A at an annual discount rate of 19 percent?

B. What is the present value of investment B at an annual discount rate of 19 percent?

C. What is the present value of investment C at an annual discount rate of 19 percent?

Q10.

You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:

Investment
End of Year	A		B		C
1	$	17,000			$	22,000
2		17,000
3		17,000
4		17,000
5		17,000	$	17,000
6				17,000		66,000
7				17,000
8				17,000
9				17,000
10				17,000		22,000

Assuming an annual discount rate of 17 percent, find the present value of each investment. Find for A,B,C.