PROBLEM5.30
a F = $2,000(F|A 10%,42) = $2,000(537.63699) = $1,075,273.98
SOLUTION USING EXCEL’S FV FUNCTION
FW = $1,075,273.98 =FV(10%,42,-2000)
b A = $1,075273.98(A|P 10%,15) = $1,075273.98(0.13147) = $141,366.27
SOLUTION USING EXCEL’S FUNCTIONS
A = $141,370.33 =PMT(10%,15,-FV(10%,42,-2000))
c A = $1,075273.98(A|P 10%,20) = $1,075,273.98(0.11746) = $126,301.68
SOLUTION USING EXCEL’S FUNCTIONS
A = $126,301.28 =PMT(10%,20,-FV(10%,42,-2000))
d A = $1,075273.98(A|P 10%,25) = $1,075,273.98(0.11017) = $118,462.93
SOLUTION USING EXCEL’S FUNCTIONS
A = $118,460.86 =PMT(10%,25,-FV(10%,42,-2000))
PROBLEM 5.31
SOLUTION USING INDIVIDUAL CASH FLOWS AND F|P FACTORS
j i
8.00% 5.00%
EOY CF (F|P i%,n-t) FW OF CF
0 $0.00 2.40662 $0.00
1 $300.00 2.29202 $687.61
2 $324.00 2.18287 $707.25
3 $349.92 2.07893 $727.46
4 $377.91 1.97993 $748.24
5 $408.15 1.88565 $769.62
6 $440.80 1.79586 $791.61
7 $476.06 1.71034 $814.23
8 $514.15 1.62889 $837.49
9 $555.28 1.55133 $861.42
10 $599.70 1.47746 $886.03
11 $647.68 1.40710 $911.35
12 $699.49 1.34010 $937.39
13 $755.45 1.27628 $964.17
14 $815.89 1.21551 $991.72
15 $881.16 1.15763 $1,020.05
16 $951.65 1.10250 $1,049.19
SOLUTION USING FACTOR TABLES
F = $300(F|A1 i%,j%,n) = $300(F|A1 5%,8%,18) = $300(52.98001) = $15,894.00
FW = $15,894.00 =FV(5%,18,,-NPV(5%,C9:C26))
PROBLEM 5.32
SOLUTION USING CALCULATED FACTOR VALUES
10.00% $1,000,000.00
FIRST DEPOSIT NUMBER OF DEPOSITS (A|F i%,n) ANNUAL DEPOSIT
25 41 0.00205 $2,049.80
30 36 0.00334 $3,343.06
35 31 0.00550 $5,496.21
40 26 0.00916 $9,159.04
45 21 0.01562 $15,624.39
50 16 0.02782 $27,816.62
55 11 0.05396 $53,963.14
60 6 0.12961 $129,607.38
65 1 1.00000 $1,000,000.00
SOLUTION USING EXCEL’S PMT FUNCTION
$1,000,000.00
FIRST DEPOSIT NUMBER OF DEPOSITS ANNUAL DEPOSIT
25 41 $2,049.80 =PMT(10%,C21,,-D$19)
30 36 $3,343.06 =PMT(10%,C22,,-D$19)
35 31 $5,496.21 =PMT(10%,C23,,-D$19)
40 26 $9,159.04 =PMT(10%,C24,,-D$19)
45 21 $15,624.39 =PMT(10%,C25,,-D$19)
50 16 $27,816.62 =PMT(10%,C26,,-D$19)
55 11 $53,963.14 =PMT(10%,C27,,-D$19)
60 6 $129,607.38 =PMT(10%,C28,,-D$19)
65 1 $1,000,000.00 =PMT(10%,C29,,-D$19)
PROBLEM 5.33
THE DESIRED F IS $1,000,000
A TOTAL OF 40 DEPOSITS WILL BE MADE
SOLUTION USING CALCULATED FACTOR VALUES
INTEREST RATE (A|F i%,40) DEPOSIT
4.00% 0.01052 $10,523.49
5.00% 0.00828 $8,278.16
6.00% 0.00646 $6,461.54
7.00% 0.00501 $5,009.14
8.00% 0.00386 $3,860.16
9.00% 0.00296 $2,959.61
SOLUTION USING EXCEL’S PMT FUNCTION
INTEREST RATE DEPOSIT
4.00% $10,523.49 =PMT(B20,40,,-1000000)
5.00% $8,278.16 =PMT(B21,40,,-1000000)
6.00% $6,461.54 =PMT(B22,40,,-1000000)
7.00% $5,009.14 =PMT(B23,40,,-1000000)
8.00% $3,860.16 =PMT(B24,40,,-1000000)
9.00% $2,959.61 =PMT(B25,40,,-1000000)
PROBLEM 5.34
a SOLUTION USING INDIVIDUAL CASH FLOWS AND F|P FACTORS
5.00%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
0 -$100,000.00 -$100,000.00 2.07893 -$207,892.82
1 $12,000.00 -$2,000.00 $10,000.00 1.97993 $19,799.32
2 $12,000.00 -$2,000.00 $10,000.00 1.88565 $18,856.49
3 $12,000.00 -$2,000.00 $10,000.00 1.79586 $17,958.56
4 $12,000.00 -$2,000.00 $10,000.00 1.71034 $17,103.39
5 $12,000.00 -$2,000.00 $10,000.00 1.62889 $16,288.95
6 $12,000.00 -$2,000.00 $10,000.00 1.55133 $15,513.28
7 $12,000.00 -$2,000.00 $10,000.00 1.47746 $14,774.55
8 $12,000.00 -$2,000.00 $10,000.00 1.40710 $14,071.00
9 $12,000.00 -$2,000.00 $10,000.00 1.34010 $13,400.96
10 $12,000.00 -$2,000.00 $10,000.00 1.27628 $12,762.82
11 $12,000.00 -$2,000.00 $10,000.00 1.21551 $12,155.06
12 $12,000.00 -$2,000.00 $10,000.00 1.15763 $11,576.25
13 $12,000.00 -$2,000.00 $10,000.00 1.10250 $11,025.00
15 $12,000.00 -$2,000.00 $10,000.00 1.00000 $10,000.00
$7,892.82 <- FW
SOLUTION USING EXCEL’S FV FUNCTION
FW = $7,892.82 =FV(5%,15,-10000,100000)
SOLUTION USING FACTOR TABLES
FW = -$100,000(F|P 5%,15) + $10,000(F|A 5%,15)
FW = -$100,000(2.07893) + $10,000(21.57856)
FW = $7,892.60
PROBLEM 5.35
a SOLUTION USING INDIVIDUAL CASH FLOWS AND F|P FACTORS
10.00%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
0 -$75,000.00 -$75,000.00 1.61051 -$120,788.25
1 $18,500.00 $18,500.00 1.46410 $27,085.85
2 $18,500.00 $18,500.00 1.33100 $24,623.50
3 $18,500.00 $18,500.00 1.21000 $22,385.00
4 $18,500.00 $18,500.00 1.10000 $20,350.00
5 $18,500.00 $18,500.00 1.00000 $18,500.00
-$7,843.90 <- FW
SOLUTION USING EXCEL’S FV FUNCTION
FW = -$7,843.90 =FV(10%,5,-18500,75000)
SOLUTION USING FACTOR TABLES
FW = -$75,000(F|P 10%,5) + $18,500(F|A 10%,5)
FW = -$75,000(1.61051) + $18,500(6.10510)
FW = -$7,843.90
b DECISION RULE
IF FW > 0, ACCEPT; OTHERWISE, REJECT
c NOT JUSTIFIED – CARLISLE SHOULD REJECT THE FILTER BASED ON ITS ECONOMIC MERITS
PROBLEM 5.36
a SOLUTION USING INDIVIDUAL CASH FLOWS AND F|P FACTORS
6.00%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
0 -$5,000.00 -$5,000.00 1.33823 -$6,691.13
1 -$200.00 -$200.00 1.26248 -$252.50
2 $2,000.00 -$300.00 $1,700.00 1.19102 $2,024.73
3 $4,000.00 -$600.00 $3,400.00 1.12360 $3,820.24
4 $3,000.00 -$1,000.00 $2,000.00 1.06000 $2,120.00
5 $1,600.00 -$1,500.00 $100.00 1.00000 $100.00
$1,121.34 <- FW
DUE TO THE NON-UNIFORM NATURE OF THE NET CF SERIES, EXCEL’S FV FUNCTION
IS NOT USED TO COMPUTE FW DIRECTLY.
SOLUTION USING EXCEL’S NPV AND FV FUNCTIONS
FW = $1,121.34 =FV(6%,5,,-NPV(6%,E8:E12)-E7)
DUE TO THE NON-UNIFORM NATURE OF THE NET CF SERIES, THE FACTOR TABLES
ARE NOT USED TO COMPUTE FW.
b DECISION RULE
IF FW >= 0, ACCEPT; OTHERWISE, REJECT
c DURATECH SHOULD IMPLEMENT THE PROCESS IMPROVEMENT
PROBLEM 5.37
YEAR 5 ADDITION = $5,000 COMPUTER SALVAGE VALUE
LOAN PAYMENTS = 25000*(A|P 15%,3) = 25000*(0.43798) = $10,949.50
a SOLUTION USING INDIVIDUAL CASH FLOWS AND F|P FACTORS
18.00%
EOY + INV CF – INV CF + LOAN CF – LOAN CF NET CF (F|P i%,n-t) FW OF CF
0 -$100,000.00 $25,000.00 -$75,000.00 2.28776 -$171,581.83
1 $55,000.00 -$25,000.00 -$10,949.50 $19,050.50 1.93878 $36,934.69
2 $55,000.00 -$25,000.00 -$10,949.50 $19,050.50 1.64303 $31,300.58
3 $55,000.00 -$25,000.00 -$10,949.50 $19,050.50 1.39240 $26,525.92
4 $55,000.00 -$25,000.00 $30,000.00 1.18000 $35,400.00
5 $60,000.00 -$25,000.00 $35,000.00 1.00000 $35,000.00
-$6,420.65 <- FW
DUE TO THE NON-UNIFORM NATURE OF THE NET CF SERIES, EXCEL’S FV FUNCTION
IS NOT USED TO COMPUTE FW DIRECTLY.
SOLUTION USING EXCEL’S NPV AND FV FUNCTIONS
FW = -$6,420.65 =FV(18%,5,,-NPV(18%,G11:G15)-G10)
SOLUTION USING FACTOR TABLES
FW = -$75,000(F|P 18%,5) + $19,050(F|A 18%,3)(F|P 18%,2) + $30,000(F|P 18%,1) + $35,000
FW = -$75,000(2.28776) + $19,050(3.57240)(1.39240) + $30,000(1.18000) + $35,000
FW = -$6,423.30
b DECISION RULE
IF FW > 0, ACCEPT; OTHERWISE, REJECT
c GALVANIZED PRODUCTS SHOULD NOT PURCHASE THE NEW COMPUTER SYSTEM
PROBLEM 5.38
a SOLUTION USING INDIVIDUAL CASH FLOWS AND F|P FACTORS
13.50%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
0 -$1,400.00 -$1,400.00 6.68248 -$9,355.48
1 $0.00 $0.00 5.88765 $0.00
2 $500.00 $500.00 5.18736 $2,593.68
3 $500.00 $500.00 4.57036 $2,285.18
4 $500.00 $500.00 4.02675 $2,013.37
5 $500.00 $500.00 3.54780 $1,773.90
6 $0.00 $0.00 3.12581 $0.00
7 $500.00 $500.00 2.75402 $1,377.01
8 $600.00 $600.00 2.42645 $1,455.87
9 $700.00 $700.00 2.13784 $1,496.49
10 $800.00 $800.00 1.88356 $1,506.85
11 $900.00 $900.00 1.65952 $1,493.57
12 -$1,000.00 -$1,000.00 1.46214 -$1,462.14
13 -$2,000.00 -$2,000.00 1.28823 -$2,576.45
15 $1,400.00 $1,400.00 1.00000 $1,400.00
$596.85 <- FW
DUE TO THE NON-UNIFORM NATURE OF THE NET CF SERIES, EXCEL’S FV FUNCTION
FW = $596.85 =FV(13.5%,15,,-NPV(13.5%,E8:E22)-E7)
DUE TO THE NON-UNIFORM NATURE OF THE NET CF SERIES, THE FACTOR TABLES
ARE NOT USED TO COMPUTE FW.
c QRU SHOULD INVEST
PROBLEM 5.39
a SOLUTION USING INDIVIDUAL CASH FLOWS AND F|P FACTORS
18.00%
EOY + CF – CF NET CF (F|P i%,n) FW OF CF
0 -$12.00 -$12.00 3.18547 -$38.23
1 -$1.00 -$1.00 2.69955 -$2.70
2 $5.00 $5.00 2.28776 $11.44
3 $2.00 $2.00 1.93878 $3.88
4 $5.00 $5.00 1.64303 $8.22
5 $5.00 $5.00 1.39240 $6.96
6 $2.00 $2.00 1.18000 $2.36
7 $5.00 $5.00 1.00000 $5.00
-$3.07 <- FW
DUE TO THE NON-UNIFORM NATURE OF THE NET CF SERIES, EXCEL’S FV FUNCTION
IS NOT USED TO COMPUTE FW DIRECTLY.
SOLUTION USING EXCEL’S NPV AND FV FUNCTIONS
FW = -$3.07 =FV(18%,7,,-NPV(18%,E8:E14)-E7)
DUE TO THE NON-UNIFORM NATURE OF THE NET CF SERIES, THE FACTOR TABLES
ARE NOT USED TO COMPUTE FW.
b DECISION RULE
IF FW > 0, ACCEPT; OTHERWISE, REJECT
PROBLEM 5.40
a SOLUTION USING INDIVIDUAL CASH FLOWS AND F|P FACTORS
12.00%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
0 -$2.00 -$2.00 3.10585 -$6.21
1 -$10.00 -$10.00 2.77308 -$27.73
2 -$12.00 -$12.00 2.47596 -$29.71
3 -$14.00 -$14.00 2.21068 -$30.95
4 -$16.00 -$16.00 1.97382 -$31.58
5 -$18.00 -$18.00 1.76234 -$31.72
6 $200.00 $200.00 1.57352 $314.70
7 -$10.00 -$10.00 1.40493 -$14.05
8 -$12.00 -$12.00 1.25440 -$15.05
9 -$14.00 -$14.00 1.12000 -$15.68
10 -$100.00 -$100.00 1.00000 -$100.00
$12.01 <- FW
DUE TO THE NON-UNIFORM NATURE OF THE NET CF SERIES, EXCEL’S FV FUNCTION
IS NOT USED TO COMPUTE FW DIRECTLY.
SOLUTION USING EXCEL’S NPV AND FV FUNCTIONS
FW = $12.01 =FV(12%,10,,-NPV(12%,E8:E17)-E7)
ARE NOT USED TO COMPUTE FW.
b DECISION RULE
IF FW > 0, ACCEPT; OTHERWISE, REJECT
PROBLEM 5.41
INVESTMENT 1 9.00%
EOY CF (F|P i%,n-t) FW OF CF
0 -$20,000.00 1.41158 -$28,231.63
1 $8,000.00 1.29503 $10,360.23
2 $9,000.00 1.18810 $10,692.90
3 $10,000.00 1.09000 $10,900.00
4 $11,000.00 1.00000 $11,000.00
$14,721.50 <– FW
DUE TO THE NON-UNIFORM NATURE OF THE NET CF SERIES, EXCEL’S FV FUNCTION
IS NOT USED TO COMPUTE FW DIRECTLY.
SOLUTION USING FACTOR TABLES
FW = -$20,000(F|P 9%,4) + ($8,000 + $1,000(A|G 9%,4))(F|A 9%,4)
FW = -$20,000(1.41158) + ($8,000 + $1,000(1.39250))(4.57313)
FW = $14,721.52
INVESTMENT 2
EOY CF (F|P i%,n-t) FW OF CF
1 $11,000.00 1.29503 $14,245.32
2 $10,000.00 1.18810 $11,881.00
3 $9,000.00 1.09000 $9,810.00
4 $8,000.00 1.00000 $8,000.00
$15,704.69 <– FW
SOLUTION USING FACTOR TABLES
FW = -$20,000(F|P 9%,4) + ($11,000 – $1,000(A|G 9%,4))(F|A 9%,4)
FW = -$20,000(1.41158) + ($11,000 – $1,000(1.39250))(4.57313)
FW = $15,704.75
INVESTMENT 3
EOY CF (F|P i%,n-t) FW OF CF
0 -$20,000.00 1.41158 -$28,231.63
1 $9,500.00 1.29503 $12,302.78
2 $9,500.00 1.18810 $11,286.95
3 $9,500.00 1.09000 $10,355.00
4 $9,500.00 1.00000 $9,500.00
$15,213.09 <– FW
SOLUTION USING EXCEL’S FV FUNCTION
FW = $15,213.09 =FV(9%,4,-9500,20000)
SOLUTION USING FACTOR TABLES
FW = -$20,000(F|P 9%,4) + ($9,500)(F|A 9%,4)
FW = -$20,000(1.41158) + ($9,500)(4.57313)
FW = $15,213.14
INVESTMENT 2 HAS THE HIGHEST FW AND IS PREFERRED
PROBLEM 5.42
a SOLUTION USING INDIVIDUAL CASH FLOWS AND F|P FACTORS
VENDOR A SOFTWARE
10.00%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
0 -$380,000.00 -$380,000.00 1.46410 -$556,358.00
1 $125,000.00 $125,000.00 1.33100 $166,375.00
2 $125,000.00 $125,000.00 1.21000 $151,250.00
3 $125,000.00 $125,000.00 1.10000 $137,500.00
4 $125,000.00 $125,000.00 1.00000 $125,000.00
$23,767.00 <- FW
SOLUTION USING EXCEL’S FV FUNCTION
FW = $23,767.00 =FV(10%,4,-125000,380000)
FW = -$380,000(F|P 10%,4) + $125,000(F|A 10%,4)
FW = -$380,000(1.4641) + $125,000(4.64100)
FW = $23,767.00
VENDOR B SOFTWARE
0 -$280,000.00 -$280,000.00 1.46410 -$409,948.00
1 $95,000.00 $95,000.00 1.33100 $126,445.00
2 $95,000.00 $95,000.00 1.21000 $114,950.00
3 $95,000.00 $95,000.00 1.10000 $104,500.00
4 $95,000.00 $95,000.00 1.00000 $95,000.00
$30,947.00 <- FW
SOLUTION USING EXCEL’S FV FUNCTION
FW = $30,947.00 =FV(10%,4,-95000,280000)
FW = -$280,000(F|P 10%,4) + $95,000(F|A 10%,4)
FW = -$280,000(1.4641) + $95,000(4.64100)
FW = $30,947.00
b DECISION RULE
SELECT THE PROJECT WITH THE HIGHEST FW
c MANUEL’S MANUFACTURING SHOULD BUY FROM VENDOR B
PROBLEM 5.43
HEAT LOSS WITH NO INSULATION = $1.50/YR/FT
HEAT LOSS WITH 1 INCH INSULATION IS 1.50 * (1 – 0.89) = $0.165/YR/FT
HEAT LOSS WITH 2 INCH INSULATION IS 1.50 * (1 – 0.92) = $0.12/YR/FT
NO INSULATION
ANNUAL HEAT LOSS = 1.50 * 250,000 = $375,000
10.00%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
0 $0.00 $0.00 2.59374 $0.00
2 $0.00 -$375,000.00 -$375,000.00 2.14359 -$803,845.80
3 $0.00 -$375,000.00 -$375,000.00 1.94872 -$730,768.91
4 $0.00 -$375,000.00 -$375,000.00 1.77156 -$664,335.38
5 $0.00 -$375,000.00 -$375,000.00 1.61051 -$603,941.25
6 $0.00 -$375,000.00 -$375,000.00 1.46410 -$549,037.50
7 $0.00 -$375,000.00 -$375,000.00 1.33100 -$499,125.00
10 $0.00 -$375,000.00 -$375,000.00 1.00000 -$375,000.00
-$5,976,534.23 <- FW
FW = -$5,976,534.23 =FV(10%,10,375000)
SOLUTION USING FACTOR TABLES
FW = -$375,000(15.93742)
FW = -$5,976,532.50
1 INCH INSULATION
SOLUTION USING INDIVIDUAL CASH FLOWS AND P|F FACTORS
10.00%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
5 $0.00 -$41,250.00 -$41,250.00 1.61051 -$66,433.54
6 $0.00 -$41,250.00 -$41,250.00 1.46410 -$60,394.13
7 $0.00 -$41,250.00 -$41,250.00 1.33100 -$54,903.75
8 $0.00 -$41,250.00 -$41,250.00 1.21000 -$49,912.50
9 $0.00 -$41,250.00 -$41,250.00 1.10000 -$45,375.00
10 $0.00 -$41,250.00 -$41,250.00 1.00000 -$41,250.00
SOLUTION USING EXCEL‘S FV FUNCTION
FW = -$100,000(2.59374) – $41,250(15.93742)
FW = -$916,792.58
2 INCH INSULATION
ANNUAL HEAT LOSS = 0.12 * 250,000 = $30,000
SOLUTION USING INDIVIDUAL CASH FLOWS AND P|F FACTORS
10.00%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
0 -$212,500.00 -$212,500.00 2.59374 -$551,170.27
1 $0.00 -$30,000.00 -$30,000.00 2.35795 -$70,738.43
2 $0.00 -$30,000.00 -$30,000.00 2.14359 -$64,307.66
3 $0.00 -$30,000.00 -$30,000.00 1.94872 -$58,461.51
4 $0.00 -$30,000.00 -$30,000.00 1.77156 -$53,146.83
5 $0.00 -$30,000.00 -$30,000.00 1.61051 -$48,315.30
6 $0.00 -$30,000.00 -$30,000.00 1.46410 -$43,923.00
9 $0.00 -$30,000.00 -$30,000.00 1.10000 -$33,000.00
10 $0.00 -$30,000.00 -$30,000.00 1.00000 -$30,000.00
SOLUTION USING EXCEL’S FV FUNCTION
FW = -$1,029,293.01 =FV(10%,10,30000,212500)
PROBLEM 5.44
FW(A) = $30,000*(F|P 10%,10) = $30,000*(2.59374) = $77,812.20
FW(B) = ($1,000 + 0.5X)*(F|A 10%,10)
FOR NADINE TO BE INDIFFERENT, THE FW VALUES MUST BE EQUAL, THEREFORE,
($1,000 + 0.5X)*(F|A 10%,10) = $77,812.20
($1,000 + 0.5X)*(15.93742) = $77,812.20
7.96871X = 61,874.78
X = 7,764.7 OR APPROXIMATELY 7,765 UNITS
PROBLEM 5.45
a SOLUTION USING INDIVIDUAL CASH FLOWS AND F|P FACTORS
LAGRANGE
15.00%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
0 -$1,260,000.00 –$1,260,000.00 5.35025 -$6,741,315.13
1 $480,000.00 $480,000.00 4.65239 $2,233,147.87
2 $480,000.00 $480,000.00 4.04556 $1,941,867.71
3 $480,000.00 $480,000.00 3.51788 $1,688,580.62
4 $480,000.00 $480,000.00 3.05902 $1,468,330.97
5 $480,000.00 $480,000.00 2.66002 $1,276,809.54
6 $480,000.00 $480,000.00 2.31306 $1,110,269.17
10 $480,000.00 $480,000.00 1.32250 $634,800.00
11 $480,000.00 $480,000.00 1.15000 $552,000.00
12 $480,000.00 $480,000.00 1.00000 $480,000.00
$7,179,485.20 <- FW
FW = $7,179,485.20 =FV(15%,12,-480000,1260000)
SOLUTION USING FACTOR TABLES
FW = -$1,260,000(F|P 15%,12) + $480,000(F|A 15%,12)
AUBURN
15.00%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
1 $410,000.00 $410,000.00 4.65239 $1,907,480.47
2 $410,000.00 $410,000.00 4.04556 $1,658,678.67
3 $410,000.00 $410,000.00 3.51788 $1,442,329.28
4 $410,000.00 $410,000.00 3.05902 $1,254,199.37
5 $410,000.00 $410,000.00 2.66002 $1,090,608.15
6 $410,000.00 $410,000.00 2.31306 $948,354.91
7 $410,000.00 $410,000.00 2.01136 $824,656.45
8 $410,000.00 $410,000.00 1.74901 $717,092.56
11 $410,000.00 $410,000.00 1.15000 $471,500.00
12 $410,000.00 $410,000.00 1.00000 $410,000.00
$6,540,433.52 <- FW
SOLUTION USING EXCEL’S FV FUNCTION
FW = $6,540,433.52 =FV(15%,12,-410000,1000000)
SOLUTION USING FACTOR TABLES
FW = -$1,000,000(F|P 15%,12) + $410,000(F|A 15%,12)
FW = -$1,000,000(5.35025) + $410,000(29.00167)
FW = $6,540,434.70
ANNISTON
15.00%
EOY + CF – CF NET CF (F|P i%,n-t) FW OF CF
0 -$1,620,000.00 –$1,620,000.00 5.35025 -$8,667,405.17
1 $520,000.00 $520,000.00 4.65239 $2,419,243.53
2 $520,000.00 $520,000.00 4.04556 $2,103,690.02
3 $520,000.00 $520,000.00 3.51788 $1,829,295.67
4 $520,000.00 $520,000.00 3.05902 $1,590,691.89
5 $520,000.00 $520,000.00 2.66002 $1,383,210.34
7 $520,000.00 $520,000.00 2.01136 $1,045,905.74
8 $520,000.00 $520,000.00 1.74901 $909,483.25
9 $520,000.00 $520,000.00 1.52088 $790,855.00
10 $520,000.00 $520,000.00 1.32250 $687,700.00
12 $520,000.00 $520,000.00 1.00000 $520,000.00
$6,413,461.86 <- FW
SOLUTION USING EXCEL’S FV FUNCTION
FW = $6,413,461.86 =FV(15%,12,-520000,1620000)
FW = -$1,620,000(5.35025) + $520,000(29.00167)
FW = $6,413,463.40
c QUANTUM LOGISTICS SHOULD BUILD IN LAGRANGE