1. Basic Financial Calculations MGT 4850 Spring 2008 University of Lethbridge

2. Topics http://www.santafe.edu/education/csss/csss08/programinfo.php Net Present Value Internal Rate of Return Future Value Pension and accumulation problem Continuously Compounded Interest

3. PV and NPV Discount rate10% Present value$379.08<-- =NPV(B2,B7:B11) Cash Yearflow 1100 2 3 4 5

4. Exact NPV problem in Excel Discount rate10% Net present value-20.92<-- =G7+NPV(G2,G8:G12) Cash Yearflow 0-400 1100 2 3 4 5

5. IRR 7.931%<-- =IRR(B19:B24) NPV-20.92 For discount rate 10% Cash Yearflow 0-400 1100 2 3 4 5

6. Loan amortization

7. Loan amortization 2

8. 1 step calculate IRR

9. Multiple Internal Rates of Return Discount rate6% NPV-3.99<-- =NPV(B3,B9:B13)+B8 Cash Yearflow 0-145 1100 2 3 4 5-275

10. Multiple Internal Rates of Return

11. Table Highlight the table area Activate the command Data/Table

12. Bond Cash Flows

13. Loan Amortzation

14. Future Value Problems

15. FV

16. Annuity problems

17. Compounding periods Continuous compounding

18. Continuous discounting

19. Continuous Return