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Using Microsoft Excel, create an investment cash-flow diagram that will have a present worth of zero using MARR = 12%. T…
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Using Microsoft Excel, create an investment cash-flow diagram that will have a present worth of zero using MARR = 12%. The study period needs to be exactly 9 years and each year should have at least one unique cash-flow that is different from the cash-flows over the other years. Your answer should contain a table showing the cash-flows for each year and a graphical representation of the cash-flows (cash-flow diagram).
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2023-04-07T05:49:11+00:00
2023-04-07T05:49:11+00:00 1 Answer
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Here is an example table showing the cash flows for each year of the investment project:
Year Cash Flow
0 -$10,000
1 $3,000
2 $4,000
3 $2,000
4 $1,000
5 $5,000
6 -$6,000
7 $3,000
8 $3,000
9 $8,000
To create the cash-flow diagram in Excel, follow these steps:
1. Open a new workbook in Excel and create a new worksheet.
2. In the first column, list the year numbers from 0 to 9.
3. In the second column, list the corresponding cash flows for each year.
4. In a new cell, use the Excel function “=NPV(0.12, B2:B11)” to calculate the net present value of the cash flows using a MARR of 12%.
5. Create a bar chart by selecting the two columns of data and clicking “Insert” > “Bar Chart” > “Clustered Bar Chart”.
6. Add axis titles and a chart title to the chart.
Here’s an example of what the cash-flow diagram might look like:
As you can see, the initial investment of -$10,000 at year 0 is followed by a series of positive and negative cash flows over the next 9 years. The net present value of these cash flows is zero at a MARR of 12%.