accounting

· There is NO What IF part to this assignment.

· REQUIRED ELEMENTS :

· Excel’s PV function must be used to calculate the present value of the cash flows in Part 2. Do not use the factor tables as is illustrated in the text.

· A data block and cell referencing is required for all parts of this problem.

SUGGESTIONS (FOR THE NPV ANALYSIS):

· Use the format illustrated under general information to determine the NPV of each investment.

· There will be no ‘Factor’ column since excel will calculate that for you.

· Under the ‘year(s)’ column, use ‘0’ where there would be a ‘Now’, since no time has passed from now. Be sure to input the year(s) or period(s) in your data block so you can cell reference them to your spreadsheet formulas.

· Under the ‘year(s)’ column, for any annuity, use the total number of years for the annuity instead of the range. For example: for the range ‘1-6’, you would use ‘6’ in your spreadsheet instead (the end of the range).

· To calculate the present value, use the excel formula function (PV) and NOT the tables in the textbook. See below for instructions on how to use the PV function in excel.

GENERAL INFORMATION:

Data Block Page:

You will cell reference the information from your data block page to the analysis report in your excel spreadsheet. Include the information from P11-19A in your data block page. See below for an example of a format you can use.

Discount rate:

Cost of equipment (period)

Spreadsheet Analysis Format:

SAGE COMPANY

Project Comparison Analysis

USING EXCEL TO CALCULATE PRESENT VALUE (PV) INSTRUCTIONS:

Present Value Function Instructions:

1. From the standard toolbar, select the button, ‘fx’. This button will bring up a box called ‘Insert Function’.

2. Under function category, select “Financial”.

3. Under function name, find and select “PV”.

4. After completing step 2 & 3, select “ok” to bring up the box for the PV function.

5. In the PV function box, enter in the relevant information using cell references. For example, for the ‘rate’, put your cursor in the ‘rate’ area, go to the data block, click on the ‘rate’ cell, and then click on the next area that information is needed. Some of the areas will have no cell references if it is not relevant to the calculation. When all relevant information is entered, click ‘ok’. In the example below, the cell references will be different from your cell references.

6. When placing the cell reference into the ‘Fv’ area, make sure there is a negative (-) sign before the reference, otherwise your output will have the wrong sign.

7. You will need to use the Pmt box when calculating the PV of an annuity and you will use the Fv box when calculating the PV of a single sum.

8. The Nper box is for the time period of the inflow or outflow.

Other Information :

Please be sure what you turn in is a unique product. You may work together, but you must each do your own spreadsheet. Do NOT turn in duplicate spreadsheets. We will assume you cheated and you both (or all) will get a zero for the assignment.

There is no date in your report.

Don’t forget to show dollar signs at the top if each column of data and then again at each of the solutions you calculate.

Save your work frequently! Do not be the next person telling horror stories about lost work! Back up your work on a disk.

SAVING YOUR FILE:

Save your file according to the following name format:

Original data file: (Your Last Name, First Name Initial) Excel#3.

For Example:  SmithJExcel3.xls or SmithJExcel3.xlsx (depending on which version of Microsoft you are using).

SUBMISSION OF YOUR EXCEL ASSIGNMENT:

Put a footer on each page in the bottom right-hand corner which includes your name and ZID#. Before submitting your Excel assignment, check the Print Preview to make sure your report is centered (horizontally) in the page and you have included the footer. Make sure you attach the correct file before clicking the submit button on Bb.

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