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Plans A and B are both growing perpetuities, with the first cash flow coming one year from now. The first cash flow is the same for both Plans A and B, cell B2. The discount rates for the two plans are in cells B3:C3. The growth rates for the two plans are in cells B4:C4. Plan A has a growth rate of 0%, so it could also be called a perpetuity. For the purposes of this assignment, the difference between the discount rate and the growth rate are the same for Plans A and B.

First, write a formula in cell B5 that can be pasted for cells B5:C5 to find the present value of Plans A and B.

Second, write a formula in cell F2 that can be pasted for cells F2:G11 to find the size of the first ten cash flows for Plans A and B.

Third, write a formula in cell F14 that can be pasted for cells F14:G23 to find the present value of each of the first ten cash flows for Plans A and B.

Fourth, write a formula in cell J2 that can be pasted for cells J2:K11 to find the cumulative present value through the first ten cash flows. Hint: Cell K6 should have the present value of the cash flows that arrive in one year, two years, three years, four years, and five years for Plan B.

Fifth, write a formula in cell J14 that can be pasted for cells J14:K23 to display the present value of all the cash flows after these dates. Hint: Cell K16 should have the present value of the fourth, fifth, sixth, seventh, etc. cash flows.

Sixth, use one of the four data blocks to create a graph for the Growing document that demonstrates that the present value of Plans A and B are identical, even though all of the cash flows are different and the present value of each of the cash flows are different. The graph should be its own page in the spreadsheet, label it Graph Growth. Paste the graph as a picture into the Growth document.

Seventh, on the Growing document describe the graph, explain the financial concept and your anticipations, and describe details of the graph due to this information and how you find it to relate to the financial concept.