Question

In: Finance

Net Present Value of Payouts The NPV of a series of values is calculated using a...

Net Present Value of Payouts The NPV of a series of values is calculated using a discount rate applied to those values. Apply the NPV function to the series of expected benefit payouts using .075 as the discount rate. You can hard-code the discount rate. How would you calculate this in Excel? Please show calculation and logic used in excel, so I understand. Below are the values:

Year Expected Benefit Payouts
2016 NA
2017 $19,661,882,100.00
2018 $19,909,120,629.23
2019 $20,162,051,346.58
2020 $20,420,680,083.92
2021 $20,685,015,994.25
2022 $20,955,071,470.68
2023 $21,230,862,069.61
2024 $21,512,406,437.74
2025 $21,799,726,242.91
2026 $22,092,846,108.56
2027 $22,391,793,551.78
2028 $22,696,598,924.58
2029 $23,007,295,358.62
2030 $23,323,918,712.87
2031 $23,646,507,524.45
2032 $23,975,102,962.33
2033 $24,309,748,783.82
2034 $24,650,491,293.79
2035 $24,997,379,306.50
2036 $25,350,464,110.00
2037 $25,709,799,432.87
2038 $26,075,441,413.41
2039 $26,447,448,571.04
2040 $26,825,881,779.94
2041 $27,210,804,244.76
2042 $27,602,281,478.45
2043 $28,000,381,281.99
2044 $28,405,173,726.15
2045 $28,816,731,135.01
2046 $29,235,128,071.33

Solutions

Expert Solution

In the above solution, PV of cash flows at both 2015 and 2016 are considered.

Note: Please let me know if any doubt on the formulae given below.

Formulae

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

What is Net Present Value – NPV A)An indicator of a company's profitability, calculated as revenue...
What is Net Present Value – NPV A)An indicator of a company's profitability, calculated as revenue minus expenses, excluding tax and interest B)A regulation for evaluating whether to proceed with a project or investment. C)None of them D)The difference between the present value of cash inflows and the present value of cash outflows
How is the net present value (NPV) calculated for a project with a conventional cash flow...
How is the net present value (NPV) calculated for a project with a conventional cash flow pattern, and what are the acceptance criteria for NPV, how are they related to the firm’s market value with explanation of the similarities and differences between NPV, PI, and EVA. PLEASE MINIMUM 350 WORDS.
The NPV (net present value) of Plan Alpha is $ (130,539) The NPV (net present value)...
The NPV (net present value) of Plan Alpha is $ (130,539) The NPV (net present value) of Plan Beta is $ 233,001 The IRR (internal rate of return) of Plan Alpha is $ 19.36 %. The IRR (internal rate of return) of Plan Beta is $ 21.25 %. Which​ plan, if​ any, should the company​ pursue? Based on the results​ above, the company should pursue Plan Beta because the NPV is positive and the IRR is greater than the​ company's...
Net present value (NPV)The net present value (NPV) rule is considered one of the most...
Net present value (NPV)The net present value (NPV) rule is considered one of the most common and preferred criteria that generally lead to good investment decisions.Consider this case:Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $2,225,000. The project is expected to generate the following net cash flows:YearCash FlowYear 1$275,000Year 2$475,000Year 3$450,000Year 4$450,000Pheasant Pharmaceuticals’s weighted average cost of capital is 8%, and project Beta has the same risk as the...
1. Net present value (NPV) Evaluating cash flows with the NPV method The net present value...
1. Net present value (NPV) Evaluating cash flows with the NPV method The net present value (NPV) rule is considered one of the most common and preferred criteria that generally lead to good investment decisions. Consider this case: Suppose Cold Goose Metal Works Inc. is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $450,000. The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $325,000 Year 2...
1. Net present value (NPV) Evaluating cash flows with the NPV method The net present value...
1. Net present value (NPV) Evaluating cash flows with the NPV method The net present value (NPV) rule is considered one of the most common and preferred criteria that generally lead to good investment decisions. Consider this case: Suppose Happy Dog Soap Company is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $3,000,000. The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $300,000 Year 2 $475,000...
Evaluate the following projects, using the Net Present Value (NPV). Assume a cost of capital of...
Evaluate the following projects, using the Net Present Value (NPV). Assume a cost of capital of 6%.    Project A    Project B Initial Cash Outflow $200,000 $160,000 Year 1 Cash flow 69,000 80,000 Year 2 Cash flow 71,000 80,000 Year 3 Cash flow 85,000 50,000 Calculate the NPV for each project. Which project would you accept according to the NPV?
What is the difference between discounted present value and net present value?   What is the NPV...
What is the difference between discounted present value and net present value?   What is the NPV of the following cash flows, assuming a 6% discount rate? Initial investment – year 0: $(1,000,000) Year 1 cash flows: $100,000 Year 2 cash flows: $100,000 Year 3 cash flows: $100,000 Year 4 -sale: $1,200,000
1. What is the net present value (NPV) of the project? 2. Based on this NPV,...
1. What is the net present value (NPV) of the project? 2. Based on this NPV, should Hasbro undertake this project? 3. What is the internal rate of return (IRR) of this project? You can find IRR by varying the discount rate in your table until NPV is zero. That new discount rate will be the IRR. Your grade will be based on the completeness of your cash flow table and calculations as well as your answers above. Monopoly expansion...
1. What is the net present value (NPV) of the project? 2. Based on this NPV,...
1. What is the net present value (NPV) of the project? 2. Based on this NPV, should Hasbro undertake this project? 3. What is the internal rate of return (IRR) of this project? You can find IRR by varying the discount rate in your table until NPV is zero. That new discount rate will be the IRR. Your grade will be based on the completeness of your cash flow table and calculations as well as your answers above. Monopoly expansion...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT