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11a . Ten years from today, youll begin to receive payments from an annuity stream. The first payment will be $420. The last payment will be received 20 years from today. The payments that comprise the annuity stream are all of the same magnitude (g = 0). Using an effective annual discount rate (EAR) of 7.80%, determine the present value of the entire set of cash flows.

Hint: Its critical to remember that the NPV command does notallow you to include any cash flows that occur immediately. As such, the correct answer is not $1428.64. (Thats the value at time minus one). For additional guidance, you might want to read the discussion regarding the NPV command in Appendix 4-A. In addition, you might want to also compute the present value by hand to ensure you have the correct value.

Enter a value with the same sign as provided by the NPV command.

part b Use Excels NPV command to solve Problem 11 (again), but now have the size of payments that comprise the annuity stream grow at 5% per year.

Enter a value with the same sign as provided by the NPV command.

part c. Use Excels NPV command to solve Problem 11 b (again), but now also include a payment, made by you, of $500, paid five years from today.

Note: The answer is not $2,261.29. If you got this value, then you failed to recognize that the new cash flow is negative, and you entered +500 as the cash flow.

Enter a value with the same sign as provided by the NPV command.

part d

Use Excels NPV command to solve Problem 11c (again), but now also include an immediate payment, made by you, of $574.37.

Note: The answer must not be the same as the answer for Problem 13. If it was, then you forgot, to augment the NPV command that you wrote (which covers only the cash flows from t = 1 to 20), with the cash flow at t = 0. See Example 13 in chapter 4 for guidance.

Enter a value with the same sign as provided by the NPV command.

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