Calculate the net present value of the sporting event

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A client approaches and they would like to hold a sporting event which can be risky in these times and wants to conduct a financial viability analysis. To get the event off the ground including all necessary staff, equipment and goods, and insurances, and the client have calculated the initial outlay of $25,000 to fund the sporting event. However, will only proceed if it is financially viable!

It is estimated that people will buy tickets gradually over time and as such Q Events can expect the following cash inflows over the next 10 months: $10,000 at the end of the first 3 months based off of ticket sales; another $7,000 at the end of the next following 3 months; $7,000 at the end of the following 2 months; and finally $4,000 at the end of 10 months. Q Events currently values money at 10% pa compounded monthly.

Problem (a) Using Excel, set up a spreadsheet to calculate the Net Present Value of the sporting event to determine whether it will be financially viable.

Problem (b) Using Excel, create a column chart of the all the monthly cashflows associated with the event.

Reference no: EM132985703

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