,Discount rate 8%
NPV 71.01 <-- =B6+NPV(B1,B7:B16)
IRR 10.56% <-- =IRR(B6:B16)
Year Cash flow
0 -600
1 100
2 100
3 100
4 100
5 100
6 100
7 100
8 100
9 100
10 100
Decision: The NPV > 0 and hence you should purchase the asset.
Note that the IRR > discount rate, which leads to the same decision.
,Cost 10,000
Payment $2,983.16 <-- =PMT(B3,5,-B1)
Interest 15%
Division of payment between:
Principal Payment
Cell D7 contains
Year at beginning at end of Interest Principal
formula =$B$3*B7
of year year
1 10,000.00 2,983.16 1,500.00 1,483.16 <-- =C7-D7
2 8,516.84 2,983.16 1,277.53 1,705.63
3 6,811.22 2,983.16 1,021.68 1,961.47
4 4,849.74 2,983.16 727.46 2,255.69
5 2,594.05 2,983.16 389.11 2,594.05
6 0.00
Cell B8 contains formula =B7-
E7
, Cell D7 contains
formula =$B$3*B7
NPV 71.01 <-- =B6+NPV(B1,B7:B16)
IRR 10.56% <-- =IRR(B6:B16)
Year Cash flow
0 -600
1 100
2 100
3 100
4 100
5 100
6 100
7 100
8 100
9 100
10 100
Decision: The NPV > 0 and hence you should purchase the asset.
Note that the IRR > discount rate, which leads to the same decision.
,Cost 10,000
Payment $2,983.16 <-- =PMT(B3,5,-B1)
Interest 15%
Division of payment between:
Principal Payment
Cell D7 contains
Year at beginning at end of Interest Principal
formula =$B$3*B7
of year year
1 10,000.00 2,983.16 1,500.00 1,483.16 <-- =C7-D7
2 8,516.84 2,983.16 1,277.53 1,705.63
3 6,811.22 2,983.16 1,021.68 1,961.47
4 4,849.74 2,983.16 727.46 2,255.69
5 2,594.05 2,983.16 389.11 2,594.05
6 0.00
Cell B8 contains formula =B7-
E7
, Cell D7 contains
formula =$B$3*B7
