Question: Q5 Financial maths Initial investment: E 25,000 Year 1 return: 8,000 Year 2 return: E 15,000 Year 3 return: E Year 4 return: E

Q5 Financial maths Initial investment: E 25,000 Year 1 return: 8,000 Year

Q5 Financial maths Initial investment: E 25,000 Year 1 return: 8,000 Year 2 return: E 15,000 Year 3 return: E Year 4 return: E 10,000 5,000 (i) Enter appropriate formulae in the shaded cells in the table below to calculate the NPV for interest rates of 5%, 10% 15%, 20% and 25%. (Use the NPVs calculated in part (i) to produce a scatterplot from which to estimate the Internal Rate of Return of the project. Enter your answer in cell E27 2) Calculate the IRR by entering an appropriate formula in cell E28. Present value Year 0 Investments/ Returns () 25000 5% interest 10% interest 15% interest 1 8000 2 15000 10000 4 5000 NPV: Internal rate of return Estimate from scatterplot Excel function 20% interest 25% interest

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