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Needed into a excel page format We need to use the basic time value of money...

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Accounting

Needed into a excel page format

We need to use the basic time value of money function tocalculate the answer to this question. According to th basic TVMfunction: PV = FV / (1 + r)n where FV is future value, PV ispresent value, r is the discount rate and n is the number ofperiods. PV = frac{500}{(1 + 0.15)^1} + frac{1000}{(1 + 0.15)^5}PV = 434.7826 + 497.1767 = $931.96 b. This is an ordinary annuity,the present value of which can be represented mathematically as:Here, for our question, P = $1,200, r = 10%, n = 5 years.Substituting the values in formula, we get: PV = 1200 * [frac{1 -(1 + 0.10)^{-5}}{0.10}] PV = $4,548.94 c. Perpetual cashflows canbe discounted and present value for them can be calculated usingthe formula below: PV = 100/8% PV = $1,250 d. This is an example agrowing perpetuity, the present value for which can be calculatedusing the following formula: PV = 100/(8% - 3%) PV = $2,000

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