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a. C. MICP1.1. What is the future worth of $1000 deposited today, 10 years from now if the APR is 5% compounded yearly? Show interest earned and account balance at the end of every year using a spreadsheet. Copy the spreadsheet on to the word file for submission. Check using a hand calculation. Show your hand calculation results on your word file. b. 5% compounded monthly? What is the Effective Annual Interest rate in this case? Check using the formula and also using a spreadsheet to calculate account balance at the end of year if interest is compounded monthly. In your world file show the spreadsheet calculation of the Effective Interest Rate and the hand calculation as well. Repeat part (a) for an APR of 10%. No need to show the spreadsheet this time. What is difference in Future Worth compared to 5% APR? M1CP1.2. Setup a spreadsheet to compute the Present Worth of the following cash flows associated with a project. APR (Annual percentage rate) is 5%. Assume yearly compounding. Year Cash Flow 0, Start of Project -20,000 (Negative to show outflow) 1 (End of first year) 4000 2 4000 3 5000 4 7000 5 5000 6 5000 b. Draw the cash flow diagram using Excel. Copy the spreadsheet table and graph to your word file for submission. c. What is the discounted cash flow each year? Show in Excel and then copy to word file. d. What is the Payback Period with interest? Estimate by plotting the Cumulative Discounted Cash Flow every year. Summarize your calculations on your word file. Repeat your calculation of Payback period if the APR is raised to 10%. e. What is the Discounted Cash Flow Rate of Return? Compute using Goalseek in Excel. File Home Insert Draw Page Layout Formulas Data Review View Help 6 Share Comments F18 f 0.1223 A B С C D E F G H J. K L M N 1 interest rate 0.05 Cash Flow u WN 4 Problem CP1.2 $10,000.00 $5,000.00 6 Year S- 7 1 2 3 4 5 6 $(5,000.00) 8 9 Cash Flow DCFK Cum DCF 0 $(20,000.00) $ (20,000.00) $ (20,000.00) 1 $ 4,000.00 $ 3,809.52 $(16,190.48) 2 $ 4,000.00 $ 3,628.12 $(12,562.36) 3 $ 5,000.00 $ 4,319.19 $ (8,243.17) 4 $ 7,000.00 $ 5,758.92 $ (2,484.25) 5 $ 5,000.00 $ 3,917.63 $ 1,433.38 6 $ 5,000.00 $ 3,731.08 $ 5,164.45 Cum DCF 10 11 $10,000.00 12. $5,000.00 3 $- 4. 1 2 3 5 6 7 Net Present Worth $ 5,164.45 5 5 Profitability Indices 7 3 $(5,000.00) $(10,000.00) $(15,000.00) $(20,000.00) $(25,000.00) Discounted Cash Flow Rate of Return 0.1223 Sheet1

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