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Find the following values for a lump sum assuming annual compounding:
The future value of $500 invested at 8 percent for one year
The future value of $500 invested at 8 percent for five years
The present value of $500 to be received in one year when the opportunity cost rate is 8 percent.
The present value of $500 to be received in five years when the opportunity cost rate is 8 percent.
Find the following values assuming a regular, or ordinary, annuity:
The present value of $400 per year for ten years at 10 percent
The future value of $400 per year for ten years at 10 percent
The present value of $200 per year for five years at 5 percent
The future value of $200 per year for five years at 5 percent
Consider an uneven cash flow stream:
Year Cash Flow
0 $2,000
1 $2,000
2 $0
3 $1,500
4 $2,500
5 $4,000
What is the present (Year 0) value of the cash flow stream if the opportunity cost rate is 10 percent?
What is the value of the cash flow stream at the end of Year 5 if the cash flows are invested in an account that pays 10 percent annually?
Please use the Excel worksheet (clicking this link will download the worksheet) provided to complete this assignment. To view the Excel file, use the download button and then open the file in Microsoft Excel. Follow the instructions provided in the worksheet and input the data to complete the assignment. The worksheet will complete all of the calculations as you input the data in the yellow-shaded areas. Once completed, save the file and submit it via dropbox.
Review this video for assistance with question 1, 2, and 3. Please let your instructor know if you have any questions.
Length Requirement: 1-2 page paper (be sure to show all calculations)
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