Solving for single cash flow FV: Solving for single cash flow PV:

Solve for: Solve for:

PV r t FV FV r t PV
24000 0.05 10 39093.471 60 0.15 10 14.83108
Solving for time Solving for implied interest rate
Solve for: Solve for:
FV PV r t FV PV t r
1.21 1 0.1 2 16 10.45 4 0.112374
Solving for effective annual yield
Solve for:
APR m Effective
0.0595 12 0.0611497344
0.059 365 0.060770183
Continuous Effective
0.1 0.1051709181
Solving for PV of perpetuity Solving for PV of growing perpetuity:
Solve for: Solve for:
Fixed C r PV C1 r g PV
100 0.05 $2,000.00 100 0.15 -0.25 $250.00
Solving for PV of annuity Solving for PV of growing annuity
Solve for:
C r t PV C1 r t
$579,000.00 0.12 3 $1,390,660.30430 3 0.15 10

Solving for FV of growing annuity

C1 r t
160 0.006667 180

$0.00
owing annuity Solving for annuity payment
Solve for: Solve for:
g PV PV r t C
0.12 $23.23 $1,000,000.00 0.0075 24 $45,684.74

###

owing annuity
Solve for:
g PV
0 $55,366.12
Solving for annuity length Solving for annuity length
Solve for:
PV r C t Years FV r
$270,000.00 0.0037417 $1,777.48 224.96 18.74683 270000 0.003075
or annuity length
Solve for:
C t Years
1777.48 124.8366 10.40305
LOAN INPUTS Solve for: Create payoff table
PV r t C Year Payment
$200,000.00 0.06 25 $15,645.34 0
1 $15,645.34
2 $15,645.34
3 $15,645.34
4 $15,645.34
5 $15,645.34
6 $15,645.34
7 $15,645.34
8 $15,645.34
9 $15,645.34
10 $15,645.34
11 $15,645.34
12 $15,645.34
13 $15,645.34
14 $15,645.34
15 $15,645.34
16 $15,645.34
17 $15,645.34
18 $15,645.34
19 $15,645.34
20 $15,645.34
21 $15,645.34
22 $15,645.34
23 $15,645.34
24 $15,645.34
25 $15,645.34
How expensive must be closing costs
to keep you from immediately refinancing at 5.8%? SUMS $391,133.59

LOAN INPUTS Solve for:

PV r t C
$200,000.00 0.06 25 $15,645.34
$200,000.00 0.058 25 $15,349.26
Savings = $296.08

Solving for PV of annuity

Solve for:
C r t PV
$296.08 0.06 25 $3,784.91

Note that this assumes you would not soon be selling the property…
 Interest Principal Balance
$200,000.00
$12,000.00 $3,645.34 $196,354.66
$11,781.28 $3,864.06 $192,490.59
$11,549.44 $4,095.91 $188,394.68
$11,303.68 $4,341.66 $184,053.02
$11,043.18 $4,602.16 $179,450.86
$10,767.05 $4,878.29 $174,572.57
$10,474.35 $5,170.99 $169,401.58
$10,164.09 $5,481.25 $163,920.33
$9,835.22 $5,810.12 $158,110.20
$9,486.61 $6,158.73 $151,951.47
$9,117.09 $6,528.26 $145,423.22
$8,725.39 $6,919.95 $138,503.27
$8,310.20 $7,335.15 $131,168.12
$7,870.09 $7,775.26 $123,392.86
$7,403.57 $8,241.77 $115,151.09
$6,909.07 $8,736.28 $106,414.81
$6,384.89 $9,260.45 $97,154.36
$5,829.26 $9,816.08 $87,338.28
$5,240.30 $10,405.05 $76,933.23
$4,615.99 $11,029.35 $65,903.88
$3,954.23 $11,691.11 $54,212.77
$3,252.77 $12,392.58 $41,820.19
$2,509.21 $13,136.13 $28,684.06
$1,721.04 $13,924.30 $14,759.76
$885.59 $14,759.76 $0.00

$191,133.59 $200,000.00
Another utilization of cash flow analysis is setting the bid price on a project. To
calculate the bid price, we set the project NPV equal to zero and find the required
price. Thus the bid price represents a financial break-even level for the project.
Guthrie Enterprises needs someone to supply it with 152,000 cartons of machine
screws per year to support its manufacturing needs over the next five years, and
you’ve decided to bid on the contract. It will cost you $1,920,000 to install the
equipment necessary to start production; you’ll depreciate this cost straight-line to
zero over the project’s life. You estimate that in five years this equipment can be
salvaged for $162,000. Your fixed production costs will be $277,000 per year, and your
variable production costs should be $9.70 per carton. You also need an initial
investment in net working capital of $142,000. If your tax rate is 34 percent and you
require a 12 percent return on your investment, what bid price per carton should you
submit?

Cartons 152000
Investment 1920000 Price/Carton 15.532301 Note that if I change the yello
Life 5 the NPV>0, and if I change it
Dep 384000 OCF = 532836.437 the NPV<0.

Salvage 162000 PV(Inv) -1920000 You should look inside

Tax 0.34 PV(NWC) -61425.3865 each of these PV formulas
AfterTax Salv 106920 PV(Salv) 60669.2794 to see the logic.
PV(OCF) 1920756.11
Fixed 277000
Var Cost 9.7 NPV = 0 Using goal seek, I ask it to set NPV
cell equal to zero while changing
NWC 142000 the yellow cell.
r 0.12

NOTE: The given numbers in your question

may be slightly different!
ect. To
required
roject.
machine
ars, and
all the
ght-line to
t can be
year, and your
nitial
ent and you
n should you

Note that if I change the yellow cell above this value

he NPV>0, and if I change it less than 15.53, then

You should look inside

ach of these PV formulas
o see the logic.

seek, I ask it to set NPV

to zero while changing
cell.