Professional Documents
Culture Documents
15 20.00% 49.33% 16
11 14.67% 64.00%
14
17 22.67% 86.67%
6 8.00% 94.67% 12
1 1.33% 96.00% 10
2 2.67% 98.67%
8
1 1.33% 100.00%
75 6
GRADE DISTRIBUTION 0
2 3.2 4.4 5.6 6.8 8 9.2 10.4 11.6 12.8 14
No of CandidatesPERCENT Cumulative
10 13.33% 13.33%
17 22.67% 36.00%
40 53.33% 89.33%
8 10.67% 100.00%
75
equency
Frequency
15 21%
16 Two IRRs 24%
17 27%
18 12.00 30%
19 33%
10.00
20 36%
21 8.00 39%
22 6.00
23
4.00
24
25 2.00
26 0.00
27 0% 5% 10% 15% Discount
20% 25%rate 30% 35% 40% 45%
28
29
30
31 Identifying the two IRRs
32 First IRR 8.78% <-- =IRR(B8:B13,0)
33 Second IRR 26.65% <-- =IRR(B8:B13,0.3)
34
35
Table header
36 Data table: Effect of
=NPV(F65,D67:D74)+D66
37 discount rate on NPV.
38 Year Cash flow 1000.00
NPV of Bond Cash Flow
39 0 -800 0% 1000.00
40 1 100 2% 786.04
1200
41 2 100 4% 603.96
1000
42 3 100 6% 448.39
NPV
800
43 4 100 8% 314.93 600
44 5 100 10% 200.00 400
45 6 100 12% 100.65 200
7 100 14% 14.45 0
46
-200 0% 5% 10% 15%
47 8 1100 16% -60.62 -400
48 18% -126.21
Discount rate
49 IRR 14.36% 20% -183.72
600
400
200
0
-200 0% 5% 10% 15%
-400
Discount rate
A B C D E F G H I
50
51 =IRR(D66:D74)
52
J K L
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Table header
36
=NPV(F65,D67:D74)+D66
37
38
NPV of Bond Cash Flows
39
40
1200
41
1000
42
NPV
800
600 43
400 44
200 45
0 46
-200 0% 5% 10% 15% 20% 25%
-400
47
48
Discount rate
49
600
400
200
0
-200 0% 5% 10% 15% 20% 25%
-400
Discount rate
J K L
50
51
52
UN-19J
A B C D E F G H I J K
1 CF1 234
2 Growth rate 10%
3 Discount rate 15% =C6*(1+$B$2) =D6*(1+
4 $B$2)
5 Year 0 1 2 3 4 5 6 7
6 Cash flow -1150.00 234.00 257.40 283.14 311.45 342.60 376.86 414.55
7
8 NPV 101.46 <-- =+B6+NPV(B3,C6:I6)
9 IRR 17.60% <-- =IRR(B6:I6,0)
10
11 =B8 =B9
12
13 NPV IRR
14 101.4557 0.176025
15 0
16 Sensitivity Analysis Growth 5%
17 rate 10%
18 15%
19
20 =B8
21 Two Dimensional Data Table Discount rate
22 How does NPV changes with 101.46 7% 10% 12%
23 changing GROWTH rates and Changing Growth 0
24 DISCOUNT rates rate 5%
25 10%
26 15%
Effecient Frontier
A B C D E F G H
1 CALCULATING THE MEAN AND SIGMA OF A PORTFOLIO
2
3 Proportion of A 0.5
4
5 Month R At RBt Rpt
6 1 -3.58% -0.33% -1.96% <-- =C6*$B$3+(1-$B$3)*D6
7 2 -3.16% 4.43% 0.63%
8 3 5.74% -3.54% 1.10%
9 4 7.28% 11.71% 9.50%
10 5 -0.45% 4.57% 2.06%
11 6 5.51% 0.00% 2.75%
12 7 3.09% 16.42% 9.76%
13 8 2.97% 4.29% 3.63%
14 9 5.33% 2.07% 3.70%
15 10 14.43% 16.03% 15.23%
16 11 2.40% -0.64% 0.88%
17 12 -0.68% -13.38% -7.03%
18 Mean 3.24% 3.47% 3.35% <-- =AVERAGE(E6:E17)
19 Variance 0.23% 0.65% 0.31% <-- =VARP(E6:E17)
20 St. dev. 4.78% 8.03% 5.60% <-- =STDEVP(E6:E17)
21 Covariance 0.0019056
22
23 Proportion Sigma Mean
24 5.60% 3.35% <-- Table headers: =SQRT(E19) and =E18 respectively
25 0
26 0.075
27 0.15 see Chapter 26. Eficient Front
28 0.225
29 0.3
4.00%
30 0.375
3.50%
31 0.45
Mean
32 0.525 3.00%
33 0.6 2.50%
34 0.675 2.00%
35 0.75 1.50%
36 0.825 1.00%
37 0.9 0.50%
38 0.975
0.00%
39 1.05
5.00% 6.00% 7.00% 8.00%
40 1.125
41 1.2 Sigm
42 1.275
43 1.35
44 1.425
45 1.5
46 1.575
Page 18
Effecient Frontier
I J K L M N
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17 Another Way
18 3.35% #NAME?
19 0.31% #NAME?
20 5.60% #NAME?
21
22
23
24
25
26
27 Eficient Frontier
28
29
30
31
32
33
34
35
36
37
38
39
6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 12.00%
40
41 Sigma
42
43
44
45
46
Page 19
A B C D E F G H
1 FLAT PAYMENT SCHEDULES
2
3 Loan principal 10,000
4 Interest rate 7%
5 Loan term 6 <-- Number of years over which loan is repaid
6 Annual payment 2,097.96 <-- To be made at end of each year
7
8 Principal Payment Split payment into:
9 Year at begin. at end of Return of =$B$4*C11
10 of year year Interest principal
11 1 10,000.00 2,097.96 700.00 1,397.96
12 2 8,602.04 2,097.96 602.14 1,495.82 =D11-E11
13 3 7,106.23 2,097.96 497.44 1,600.52
=C11-F11
14 4 5,505.70 2,097.96 385.40 1,712.56
15 5 3,793.15 2,097.96 265.52 1,832.44
16 6 1,960.71 2,097.96 137.25 1,960.71
A B C D E F G
1 FUTURE VALUE WITH ANNUAL DEPOSITS
2
3 Interest 10%
4
5 Year Account Deposit at Interest Total in
6 balance beginning earned account
7 beg. year of year during year end of year
8 0 0.00 1,000 100.00 1,100.00 <-- =D8+C8+B8
9 1 1,100.00 1,000 210.00 2,310.00
10 2 2,310.00 1,000 331.00 3,641.00 =$B$3*(C8+B8)
11 3 3,641.00 1,000 464.10 5,105.10
12 4 5,105.10 1,000 610.51 6,715.61
13 5 6,715.61 1,000 771.56 8,487.17
14 6 8,487.17 1,000 948.72 10,435.89
15 7 10,435.89 1,000 1,143.59 12,579.48
16 8 12,579.48 1,000 1,357.95 14,937.42
17 9 14,937.42 1,000 1,593.74 17,531.17
18 10 17,531.17
19 =E8
20
21 Future value $17,531.17 <-- =FV(B3,A18,-1000,,1)
A B C D E F
1 A RETIREMENT PROBLEM
2
3 Interest 8%
4 Annual deposit 29,387
5 Annual retirement withdrawal 30,000
6
7 Year Account Deposit at Interest Total in
8 balance beginning earned account
9 beg. year of year during year end of year
10 0 0.00 29,387 2,350.92 31,737.48
11 1 31,737.48 29,387 4,889.92 66,013.95
12 2 66,013.95 29,387 7,632.04 103,032.54
13 3 103,032.54 29,387 10,593.53 143,012.62
14 4 143,012.62 29,387 13,791.93 186,191.10
15 5 186,191.10 -30,000 12,495.29 168,686.39
16 6 168,686.39 -30,000 11,094.91 149,781.30
17 7 149,781.30 -30,000 9,582.50 129,363.81
18 8 129,363.81 -30,000 7,949.10 107,312.91
19 9 107,312.91 -30,000 6,185.03 83,497.94
20 10 83,497.94 -30,000 4,279.84 57,777.78
21 11 57,777.78 -30,000 2,222.22 30,000.00
22 12 30,000.00 -30,000 0.00 0.00
23
24 Numerator 126,718.54 <-- =1/(1+B3)^4*PV(B3,8,-30000)
25 Denominator 4.31 <-- =PV(B3,5,-1,,1)
26 Annual deposit 29,386.55 <-- =B24/B25
G H I J K L M N O P
1
2 Problem : You retire in FIVE years, and want to save X amount so that after retirement
3 You can withdraw 30000 each year from the account. How much should you save in
4 The first five years.
5
6 =$B$3*(D10+C10) =8*30,000/5
7 =48,000
8
9
10 <-- =E10+D10+C10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Q
1
that after retirement
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26