From the course: Investment Evaluation

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Challenge 1: Determine present, future, and terminal values

Challenge 1: Determine present, future, and terminal values - Microsoft Excel Tutorial

From the course: Investment Evaluation

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Challenge 1: Determine present, future, and terminal values

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- [Instructor] In this challenge, I'll present you with three different data sets. You can find these data sets in 01_07_Challenge1, in the exercise files. Your mission, should you choose to accept it, is to calculate the future value from Dataset 1, the present value from Dataset 2, and the present value of infinite cash flows from Dataset 3. Let's dive in and take a look. Dataset 1 is a simple stock calculation. Let's take the present value and determine the future value in a period of six years down the road. The discount rate is 12%, which is feasible if the market has a bullish run. Dataset 2 asks you to calculate the present value, given the future value. Imagine that you lease a piece of equipment for 20 years, at an annual rental fee of $10,000 per year. The discount rate is 8%. What is the present value of the piece of equipment? This one is a bit complicated to do by hand, so I suggest you use the handy dandy Excel function. Dataset 3 shows the cash flow for a project that…

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