Excel | Investment appraisal exercise | Investment appraisal XL 07

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Software ==> Excel  (151 exercises)
Version ==> Excel 2010 and later
Topic ==> Investment appraisal  (1 exercise)
Level ==> Average difficulty
Subject ==> Excel training
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You meet another friend in a pub, who wants to open a roller disco (why not?).  This will require an investment of £40,000 from you at the end of year 1, after which time you will receive annual dividends of £10,000 at the end of each of the 7 subsequent years.  All of this is shown in the file above, which you should open.

The blue cells are currently blank:

Excel 2010 exercise - Investment appraisal (image 1)

You need to create formulae to calculate the NPV and IRR

Create formulae to show that:

  • The Net Present Value for the investment for the discount rate on the inputs sheet is £11,170.09.
  • The Internal Rate of Return for the investment is 16.33%.

Would you invest the money on this basis?

You can unzip this file to see the answers to this exercise, although please remember this is for your personal use only.
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