Using Excel, provide solutions for the following problems. Use one tab for each solution. Must show work to earn credit. Submit one file with several tabs.
Part A - You are offered an investment that will pay you $100 in one year, $500 the next year, $700 the next year, and $900 at the end of the next year. You can earn 8 percent on very similar investments. What is the most you should pay for this one?
Part B - You are offered an investment that will make three $3,000 payments. The first payment will occur five years from today. The second will occur in six years, and the third will follow in seven years. If you can earn 9 percent, what is the most this investment is worth today? What is the future value of the cash flows?
Part C - What is the price of a bond with 10% annual coupon with 5 years left to maturity, if the current interest rate is 10%. calculate the price if the current market interest rates are 5% and 15%. Compare and contrast three valuation prices, explain why they are different.