You need to determine i* per year for the cash flows shown below. Since you have a new boss, you decided to perform a thorough analysis. Do the following:
(a) Use a spreadsheet to find i*.
(b) Develop two charts on the spreadsheet: a column chart that plots cash flows versus year, and a scatter chart showing PW values versus a range of i values, one of which is i*. (Hint: Use Figure 7–4 as a guide.)
(c) You were told when handed the estimates that the rate of return was about 25%. Determine the cash flows for years 2, 3, and 4 that are necessary to realize an i* of 25% per year, if they remain in the same proportion to each other as initially estimated.
 FIGURE 1.png)
(a) Enter cash flows for years 0 to 4 in cells B2:B6
Function = IRR(B2:B6) displays i* = 15.32%
(b) Two charts are included in spreadsheet with i* indicated between 15% and 16% on
the second (scatter) chart
 FIGURE 4.png)
(c) Use Goal Seek tool to change $9000 estimate in year 1 to $10,688 with multiples shown for years 3 and 4 estimates. Amounts needed are in cells B7 to B9.
 ANSWER.png)
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