Question: Please show the microsoft excel command to retrieve the present values for years 1, 3, and 5. Year 3 Year 2 4% Year 4 5%
Please show the microsoft excel command to retrieve the present values for years 1, 3, and 5.
Year 3 Year 2 4% Year 4 5% Year 5 6% 5% Year 1 Annual Discount Rate -------> 4% Option 1 - 3000 one year from now Discounted factor 0.9615 Cash Flow 3000 Presen Value 2884.6154 working note: Discounted factor = 1/1.04 = 0.9615 4000 Option 11 - 4000 three years from now Cash flow Discounted factor Presen Value working note: Discounted factor = 1/1.04 = 0.9615 0.9615 / 1.04 = 0.9246 0.9246 / 1.05 = 0.8805 0.9615 0.9246 0.8805 3522.1189 5000 Option III - 5000 five years from now Cash flow Discounted factor Presen Value 0.9615 0.9246 0.8805 0.8386 0.7911 3955.6591 working note: Discounted factor = 1/1.04 = 0.9615 0.9615 / 1.04 = 0.9246 0.9246 / 1.05 = 0.8805 0.8805 / 1.05 = 0.8386 0.8386 / 1.06 = 0.7911 Total Retunr if you hold for 3 years = $3,522
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