Thunder Corporation, an amusement park, is considering a capital nvestment in a new exhibit. Amusement parks need to rotate exhibits to keep people interested. Additional information concerning the potential investment follows. Original cost of investment Estimated sales value at end of 5 years Expected increase in annual cash flows Estimated useful life in years Borrowing rate Cost of capital $ 136,000 60,000 25,000 5 years 8.0% 10.0%

Accounting Information Systems
10th Edition
ISBN:9781337619202
Author:Hall, James A.
Publisher:Hall, James A.
Chapter15: Auditing It Controls Part Ii: Security And Access
Section: Chapter Questions
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X✔ fx Function: NPV; Formula: Add, Subtract; Cell Referencing
C
1 Function: NPV: Formula: Add, Subtract; Cell Referencing
A1
13
14
15
16
ASARANASANGARR
Thunder Corporation, an amusement park, is considering a capital
& Investment in a new exhibit. Amusement parks need to rotate exhibits to
7 keep people interested. Additional information concerning the potential
investment follows.
17
18
19
20
21
22
23
24
25
26
27
B
20
Using Excel to Determine the Net Present Value
PROBLEM
Original cost of investment
Estimated sales value at end of 5 years
Expected increase in annual cash flows.
Estimated useful life in years
Borrowing rate
Cost of capital
D
$ 136,000
60,000
25,000
5 years
8.0%
10.0%
G
H
Yes No
Check for Updates
Student Work Area
Required: Provide input into cells shaded in yelow in this template. Use the NPV
function with cell referencing to the Problem area in the input cell. Use a math
formula in the field in which the cash flow for the salvage value is expected to
occur, and separately, to account for the initial cash flow in the formula after the
function has been inputted
Net present value
Calculate the net present value of this project to the company using Excel's NPV
function.
Transcribed Image Text:open recovered workbooks? Your recent changes were saved. Do you want to continue working where you left off? Office Update To keep up-to-date with security updates, fixes, and improvements, choose Check for Updates. X✔ fx Function: NPV; Formula: Add, Subtract; Cell Referencing C 1 Function: NPV: Formula: Add, Subtract; Cell Referencing A1 13 14 15 16 ASARANASANGARR Thunder Corporation, an amusement park, is considering a capital & Investment in a new exhibit. Amusement parks need to rotate exhibits to 7 keep people interested. Additional information concerning the potential investment follows. 17 18 19 20 21 22 23 24 25 26 27 B 20 Using Excel to Determine the Net Present Value PROBLEM Original cost of investment Estimated sales value at end of 5 years Expected increase in annual cash flows. Estimated useful life in years Borrowing rate Cost of capital D $ 136,000 60,000 25,000 5 years 8.0% 10.0% G H Yes No Check for Updates Student Work Area Required: Provide input into cells shaded in yelow in this template. Use the NPV function with cell referencing to the Problem area in the input cell. Use a math formula in the field in which the cash flow for the salvage value is expected to occur, and separately, to account for the initial cash flow in the formula after the function has been inputted Net present value Calculate the net present value of this project to the company using Excel's NPV function.
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