This Excel exercise is designed to find the present value of future cash flows. Assume there are two projects X& Y with cash flows at the end of the next three years as follows. Assume that the required rate of return on projects is equal to $10\%.$

$\backslash$table$[[,$Today,Year$1,$Year $2,$Year $3],[$Project X$,-100,10,60,70],[$Project $Y,-100,80,40,20]]$

In the space below calculate the Net Present Values of projects X & Y by using the present value formula of Excel $(=$PV$($rate$,$nper,pmt$,[$fv$]).$

Note: because these are uneven cash flow streams the pmt $=0.$ We can then solve for the PV of each cash flow, where each cash flow is a FV$.$ In cell C$14,$ you can type $"=$c$13".$ In cell D$14$ you will type $"=$ PV$($ $$I$$$2,D12,0,-D13.$ You can then copy cell D$14$ to cells E$14$ and F$14.$ Next you simply need to sum the cells C$14,$ C$14,$ E$14,$ and F$14,$ to calculate the NPV for Project X$.$

$\backslash$table$[[$Project X$,0,1,2,3],[$Cash Flows,$-100,10,60,70],[$PV$($CF$),,,,],[$NPV$,,,,]]$

$\backslash$table$[[$Project X$,0,1,2,3],[$Cash Flows,$-100,10,60,70],[$PV$($CF$),,,,],[$NPV$,,,,]]$

Now copy cells B$12$ to F$15$ into the space below and change the in formation to calculate the NPV of project Y$.$ Check your answers with the book Example $2$ of Chapter $10.$

Complete the information in the Table below by changing the required rate of return, $r,$ in cell $J2$ and inputing the NPVs for projects X & Y using your analysis above.

$\backslash$table$[[r,$NPV$($X$),$NPV$($Y$)],[0\%,,],[5\%,,],[10\%,,],[15\%,,],[20\%,,],[25\%,,]]$

Create a NPV profile in the space below, by inserting a line graph from using data in the above Table.