This is a paper that is focusing on Evaluating the Financial Impact of Loans and Investments. The paper also illustrates the chapters to focus in while writing the assignment sections.

## Evaluating the Financial Impact of Loans and Investments

This week we will see:

Chapter 6 “Evaluating the Financial Impact of Loans and Investments”

Level 1 explores some fundamental financial calculations to evaluate different financing options

Level 2 & 3, these basic concepts are expanded upon to develop a cash flow analysis and an amortization table, which is a schedule for paying off a loan.

You also will learn about Excel tools for calculating depreciation, a technique used to allocate the costs of an asset over its useful life.

Chapter # 6 – Level 1: Objectives (Pages 360 – 377)

Firstly, understand how simple interest and compound interest are calculated (page 360)

Secondly, determine the value of a loan payment (PMT Function) (page 363)

Thirdly, analyze positive and negative cash flows (pages 365)

Fourthly, determine the future value and the present value of a financial transaction (Using the RATE, NPER, PV, and FV Functions (pages 368)

Lastly, determine the interest rate and the number of periods of a financial transaction (page 372)

### Evaluating the Financial Impact of Loans and Investments

We will cover Levels 1, 2, and 3.

Chapter # 6 – Level 1: Objectives (Pages 360 – 377)

Firstly, understand how simple interest and compound interest are calculated (page 360)

Secondly, determine the value of a loan payment (PMT Function) (page 363)

Thirdly, analyze positive and negative cash flows (pages 365)

Fourthly, determine the future value and the present value of a financial transaction (Using the RATE, NPER, PV, and FV Functions (pages 368)

Lastly, determine the interest rate and the number of periods of a financial transaction (page 372)

Chapter # 6 – Level 2: Objectives (Pages 379 – 399)

Set up an amortization table to evaluate a loan

Create a sequence of numbers automatically

Calculate principal and interest payments

Calculate cumulative principal and interest payments

Set up named ranges for a list

Calculate depreciation and taxes

Chapter # 6 – Level 3: Objectives (Pages 401 – 415)

Set up a worksheet to analyze profitability

Calculate the net present value

Calculate the internal rate of return

Also, calculate the return on investment