Using Excel to Determine the Net Present Value PROBLEM

Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. Amusement parks need to rotate exhibis to keep people interested.

Additional information concerning the potential investment follows.

Original cost of investment

Estimated sales value at end of $5$ years

Expected increase in annual cash flows

Estimated useful life in years

Borrowing rate

Cost of capital

Student Work Area

Required: Provide input into cells shaded in yellow in this template. Use the NPV function with cell referencing to the Problem area in the input cell. Use a math formula in the field in which the cash flow for the salvage value is expected to occur, and separately, to account for the initial cash flow in the formula after the function has been inputted.

Calculate the net present value of this project to

the company using Excel's NPV function.