Question: PLEASE HELP ME UNDERSTAND THIS PROBLEM IN EXCEL WITH ALL THE EXCEL FORMULAS. Kathy Myers frequently purchases stocks and bonds, but she is uncertain how

PLEASE HELP ME UNDERSTAND THIS PROBLEM IN EXCEL WITH ALL THE EXCEL FORMULAS.

Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $17,000 for 910 shares of Malti Companys common stock. She received a $701 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $16,000. Kathy would like to earn a return of at least 9% on all of her investments. She is not sure whether the Malti Company stock provided a 9% return and would like some help with the necessary computations. (Ignore income taxes.)

Required:
a.

Enter the Excel inputs below to be used to calculate the present value of the cash inflows from the investment.

b.

Calculate the present value of the cash inflows from the investment and the net present value of the investment. (Any cash outflows should be indicated by a minus sign. Use Microsoft Excel to calculate present values and do not round intermediate calculations.)

c. Did Kathy Myers earn at least a 9% return on her investment?
  • Yes

  • No

d.

Enter the Excel formula inputs and calculate the Internal Rate of Return for Kathy's investment.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!