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Excel ch1

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32 views8 pages

Excel ch1

Uploaded by

sabdmoulah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Corporate Finance

Dr. Ridha Esghaier

Discount Rate r 10% NPV


Period 0 1 2 3 4 r
CFt 1000 -500 -500 -500 0
Discount factor
PV (CFt)
NPV

IRR1
IRR2

in IRR function, Guess is Optional. A number that you guess is close to the result of IRR. (default 10%)

To build the data table


1/ first enter a column (or row) of data with the discount rates we would like to try, as shown in cells H3:H13.
2/ in cell I2, is a formula whose output we would like to record. In this case the formula in I2 is simply “= B6", the NPV we calculated.
3/ select cells H2:I13 as shown below, and bring up the Data Table window (from the Data > What-If Analysis menu,
4/ There we enter B1 as the “column input cell” to indicate that each entry in the column of discount rates should be substituted into cell B1. Upon clicking “ok,”
Excel will try each discount rate and record the resulting NPV in the table, generating the NPV profile
5/ to create the graph select cells H3:I13, open Insert > Scatter menu and selct "scatter with smooth lines"

step1-3 step4
B1. Upon clicking “ok,”
Corporate Finance
Dr. Ridha Esghaier

Discount Rate 8% NPV(L) NPV(S)


Period 0 1 2 3 r
CFt (L) -100 10 60 80 0%
CFt (S) -100 70 50 20 5%
10%
Discount factor 15%
PV (CFt) L 20%
PV (CFt) S 25%
NPV (L) 30%
NPV (S)
IRR(L)
IRR(S)
in IRR function, Guess is Optional. A number that you guess is close to the result of IRR. (default 10%)

0 1 2 3
CFt (L-S)

Crossover Point
Reinvestment Rate
MIRR(L)
MIRR(S)

To build the data table


1/ first enter a column (or row) of data with the discount rates we would like to try, as shown in cells H3:H9.
2/ in cell I2, is a formula whose output we would like to record. In this case the formula in I2 is simply “= B9", the NPV(L) we calculated.
3/ in cell J2, is a formula whose output we would like to record. In this case the formula in I2 is simply “= B10", the NPV(S) we calculated.
4/ select cells H2:J9 as shown below, and bring up the Data Table window (from the Data > What-If Analysis menu,
5/ There we enter B1 as the “column input cell” to indicate that each entry in the column of discount rates should be substituted into cell B1. Upon clicking “ok,”
Excel will try each discount rate and record the resulting NPV in the table, generating the NPV profile
6/ to create the graph select cells H3:J9, open Insert > Scatter menu and selct "scatter with smooth lines"
1. Upon clicking “ok,”
EXERCISE 4
PROJ X
$ -10,000.00 $ 6,500.00 $ 3,000.00 $ 3,000.00 $ 1,000.00 R
PROJ Y 0%
$ -10,000.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 3%
6%
5%
9%
12%
15%
18%
21%
24%
27%
30%
NPVX NPVY
$ 13,500.00 $ 14,000.00
$ 12,772.38 $ 13,009.84
$ 12,113.02 $ 12,127.87
$ 12,325.78 $ 12,410.83
$ 11,513.32 $ 11,339.02
$ 10,966.01 $ 10,630.72
$ 10,464.91 $ 9,992.42
$ 10,004.71 $ 9,415.22
$ 9,580.87 $ 8,891.54
$ 9,189.46 $ 8,414.97
$ 8,827.09 $ 7,979.98
$ 8,490.77 $ 7,581.84

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