Finding Present Value for a Series of Cash FlowsExcel LabFinding Present Value for a Series of Cash FlowsExcel Lab – cont.EGR 312-4 (Summer '08)Finding Present Value for a Series of Cash FlowsExcel LabExercise 1 – Find the present value for the following cash flow (assume i = 8%).a) Use the PV method for each individual cash flow.b) Use the NPV method for the series of cash flows.Exercise 2 – Find the present value for the following cash flow (assume i = 8%).a) Use the PV method for each individual cash flow.b) Use the NPV method for the series of cash flows. $300$450$500$P = ?0 1 2 3 4 5 6 7 8 $200$150 $300$450$500$P = ?0 1 2 3 4 5 6 7 8 $200$150EGR 312-4 (Summer '08)Finding Present Value for a Series of Cash FlowsExcel Lab – cont.Exercise 3 – Use Excel to find the future value (F) at the end of period 9 for the above cash flow from exercise 2 (assume i = 8%).Exercise 4 – Use Excel to find the annual worth (A) over the seven period cash flow from exercise 2 (assume i = 8%).Exercise 5 – Help me with the following: My son is currently in Kindergarten. When he was born, we opened a college savings plan and currently have $5000 in his account. Assuming he starts college after he graduates from high school, how much must I put in his account each year, including the 4 years he is in college, such that $0 remain in his account upon graduation. a) What will be the cost of education (tuition only) when he is ready to start college?Let’s make the following assumptions. The current tuition for college in a public institution is $6,000. It is increasing at a rate of 6% per year. What will the cost be in each of the 4 years he is in college?b) Create the cash flow diagram, starting with the $5000 currently in the account, and noting the annual installments I will make starting at the end of year 1 through his last year in college, and note the cash outflows from the account for the 4 years he is in college.c) Determine the annual installments that I must put into his account such that $0 will remain in his account upon graduation. Assume a 6% interest rate.d) What are the annual installments if college tuition increases at 9% per year?e) What are the annual installments if college tuition increases 9% per year, but the college savings plan returns only 5% per
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