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Chapter 13 Solutions Manual Content
13-1
Chapter 13: Applying Excel
The completed worksheet is shown below.
Note: Your worksheet may differ from the above in rows 29 and 30. The
worksheet above has been set to use the rounded-off discount factors
rather than more exact factors without rounding. For example, the factor
0.519 is rounded off from 0.519368664… If the more exact factor is used
to calculate the present value of the $150,000 total cash flow at the end of
Chapter 13 Solutions Manual Content
13-2
Chapter 13: Applying Excel (continued)
The completed worksheet, with formulas displayed, is shown below.
Chapter 13 Solutions Manual Content
13-3
Chapter 13: Applying Excel (continued)
1. With the change in the discount rate, the result is:
Chapter 13 Solutions Manual Content
13-4
Chapter 13: Applying Excel (continued)
2. For the new project, the worksheet should look like this:
Chapter 13 Solutions Manual Content
13-5
Chapter 13: Applying Excel (continued)
a. The net present value of the project is $(17,340). Again, your answer
may differ due to the precision of the calculations.
b. Increasing the discount rate results in making the negative net
Chapter 13 Solutions Manual Content
13-6
Chapter 13: Applying Excel (continued)
c. The internal rate of return is the discount rate at which the net
present value is zero. This occurs somewhere between the discount
rates 10% and 11%. The net present value at 10% is $5,330 as
shown above. The net present value at 11% is $(740) as shown
below. Therefore, the internal rate of return is between 10% and
11%.
Chapter 13 Solutions Manual Content
Chapter 13: Applying Excel (continued)
d. The amount of future uncertain salvage value that would be required
