1.

a) Calculate the Net Present Value (NPV) of the following cash flows:

Rate of Discount 5%
Initial Investment -1000 1st December, 2011
Return from 1st year 300 1st January, 2012
Return from 2nd year 400 1st February, 2013
Return from 3rd year 400 1st March, 2014
Return from 4th year 300 1st April, 2015

b) Calculate the Internal Rate of Return (IRR) for the cash flows in part a)

2. a) Olive oil can be purchased according to this price schedule:

For the first 500 gallons @ $23 per gallon
For any amount beyond 500 gallons @ $20 per gallon
Create a spreadsheet that will calculate the total price of buying x gallons of oil, where x
is a number to be entered into a cell on the spreadsheet.

b) Olive oil can be purchased according to this price schedule:

For the first 650 gallons @ $22 per gallon
For any amount beyond 650 gallons @ $20 per gallon
Create a spreadsheet that will calculate the total price of buying x gallons of oil, where x
is a number to be entered into a cell on the spreadsheet.

c) Olive oil can be purchased according to this price schedule:

For the first 650 gallons @ $23 per gallon
For any of the next 600 gallons @ $20 per gallon
For any amount beyond 1,250 gallons @ $15 per gallon
Create a spreadsheet that will calculate the total price of buying x gallons of oil, where x
is a number to be entered into a cell on the spreadsheet.